Document And Entity Information
Document And Entity Information | 12 Months Ended |
Dec. 31, 2023 shares | |
Document Information [Line Items] | |
Entity Registrant Name | SUPERCOM LTD. |
Entity Central Index Key | 0001291855 |
Document Type | 20-F/A |
Amendment Flag | true |
Document Shell Company Report | false |
Document Registration Statement | false |
Document Fiscal Year Focus | 2023 |
Document Transition Report | false |
Document Annual Report | true |
Document Period End Date | Dec. 31, 2023 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Document Fiscal Period Focus | FY |
Entity Well-known Seasoned Issuer | No |
Entity Interactive Data Current | Yes |
Current Fiscal Year End Date | --12-31 |
Entity Incorporation State Country Code | L3 |
Entity Address, Address Line One | 3 Rothschild Street |
Entity Address, City or Town | Tel Aviv |
Entity Address, Postal Zip Code | 6688106 |
Entity Emerging Growth Company | false |
Entity File Number | 001-33668 |
Entity Address, Country | IL |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 13,291,028 |
Entity Filer Category | Non-accelerated Filer |
Title of 12(b) Security | Ordinary Shares, NIS 2.5 Par Value |
Trading Symbol | SPCB |
Security Exchange Name | NASDAQ |
Document Accounting Standard | U.S. GAAP |
Auditor Firm ID | 1024 |
Auditor Location | Tel-Aviv, Israel |
Auditor Name | Yarel + Partners |
ICFR Auditor Attestation Flag | false |
Document Financial Statement Error Correction [Flag] | false |
Amendment Description | This Amendment No. 1 on Form 20-F/A (this “Amendment No. 1”) to the Annual Report on Form 20-F of SuperCom Ltd. (the “Company”) for the fiscal year ended December 31, 2023, originally filed with the U.S. Securities and Exchange Commission on April 22, 2024 (the “Original Filing”), is being filed solely to include (i) the Company’s Consolidated Statement of Operations and comprehensive loss, changes in shareholders’ equity and cash flows for the year ended December 31, 2021 and the related notes for the year ended December 31, 2021 (collectively, the “2021 Financials”), as required by Form 20-F (ii) the report of the Company’s independent registered public accounting firm dated August 14, 2024 related to the audit of the 2021 Financials, (iii) updated Item 5. Operating and Financial Review and Prospects revised to include an applicable discussion of the Company’s results of operations for the Company’s fiscal year ended December 31, 2021, and (iv) and certain other related and typographical changes. In accordance with Rule 12b-15 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), this Amendment No. A also amends Item 19 of the Original Filing to include new updated certifications, as Exhibits 12.1, 12.2 , 13.1 and 13.2, from the Company's Chief Executive Officer and Acting Chief Financial Officer, as required by Sections 302 and 906 of the Sarbanes-Oxley Act of 2002. Except as described above, no other changes have been made to the Original Filing, and this Amendment No. 1 does not modify, amend or update in any way any of the financial or other information contained in the Original Filing. This Amendment No. 1 is not intended to, nor does it, reflect events occurring after the filing of the Original Filing, and does not modify or update the disclosures therein in any way other than as required to reflect the changes described above. Information not affected by this Amendment No. 1 remains unchanged and reflects the disclosures made at the time the Original Filing was filed. Therefore, this Amendment No. 1 should be read in conjunction with any documents incorporated by reference herein and the Company's other filings made with the SEC subsequent to the filing of the Original Filing. |
Business Contact [Member] | |
Document Information [Line Items] | |
Entity Address, Address Line One | 3 Rothschild Street |
Entity Address, City or Town | Tel Aviv |
Entity Address, Postal Zip Code | 6688106 |
Entity Address, Country | IL |
Contact Personnel Name | Ordan Trabelsi |
City Area Code | 972 |
Local Phone Number | 9-8890850 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 5,206 | $ 4,042 |
Restricted bank deposit | 371 | 463 |
Accounts receivable, net of allowance for doubtful accounts of $14,124 and $12,667 as of December 31, 2023 and 2022, respectively | 13,357 | 10,852 |
Other current assets | 1,742 | 2,239 |
Inventories, net | 2,503 | 3,411 |
Patents held for sale | 5,283 | 5,283 |
TOTAL CURRENT ASSETS | 28,462 | 26,290 |
LONG-TERM ASSETS | ||
Property and equipment, net | 2,701 | 1,640 |
Intangible assets, net | 5,576 | 5,617 |
Goodwill | 7,026 | 7,026 |
Other long-term assets | 988 | 1,467 |
TOTAL LONG-TERM ASSETS | 16,291 | 15,750 |
TOTAL ASSETS | 44,753 | 42,040 |
CURRENT LIABILITIES | ||
Accounts payable | 1,883 | 1,267 |
Employees and payroll accruals | 1,015 | 1,339 |
Related parties | 100 | 168 |
Short- term loans | 792 | 900 |
Accrued expenses and other liabilities | 485 | 469 |
Short- term operating lease liabilities | 401 | 381 |
Deferred revenues | 726 | 715 |
TOTAL CURRENT LIABILITIES | 5,402 | 5,239 |
LONG-TERM LIABILITIES | ||
Long-term loans | 33,952 | 32,600 |
Other long-term liabilities | 583 | 1,070 |
TOTAL LONG TERM LIABILITIES | 34,535 | 33,670 |
TOTAL LIABILITIES | 39,937 | 38,909 |
Commitments and contingent liabilities | ||
SHAREHOLDERS' EQUITY | ||
Ordinary shares, NIS 2.5 par value - authorized 100,000,000 shares, 13,291,028 and 4,206,327 shares issued and outstanding at December 31, 2023 and 2022, respectively | 9,094 | 3,057 |
Additional paid-in capital | 102,670 | 103,000 |
Accumulated deficit | (106,948) | (102,926) |
Total shareholders' equity | 4,816 | 3,131 |
Total liabilities and shareholders' equity | $ 44,753 | $ 42,040 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) $ in Thousands | Dec. 31, 2023 USD ($) shares | Dec. 31, 2022 USD ($) shares |
Statement of Financial Position [Abstract] | ||
Accounts receivables, allowance for doubtful accounts | $ | $ 14,124 | $ 12,667 |
Ordinary shares, shares authorized | 100,000,000 | 100,000,000 |
Ordinary shares, shares issued | 13,291,028 | 4,206,327 |
Ordinary shares, shares outstanding | 13,291,028 | 4,206,327 |
CONSOLIDATED BALANCE SHEETS (_2
CONSOLIDATED BALANCE SHEETS (Parenthetical 2) - ₪ / shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Ordinary shares, par value per share | ₪ 2.5 | ₪ 2.5 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | |||
Total revenues | $ 26,570 | $ 17,649 | $ 12,267 |
Cost of revenues | |||
Total cost of revenues | 16,347 | 11,261 | 6,063 |
Gross profit | 10,223 | 6,388 | 6,204 |
Operating expenses: | |||
Research and development | 3,110 | 3,412 | 2,763 |
Sales and marketing | 2,200 | 2,657 | 1,655 |
General and administrative | 5,460 | 5,186 | 4,149 |
Other(income) expense, net | 2,812 | 1,138 | 4,374 |
Total operating expenses | 13,582 | 12,393 | 12,941 |
Operating loss | (3,359) | (6,005) | (6,737) |
Financial expenses, net | (663) | (1,751) | (3,396) |
Loss before income taxes | (4,022) | (7,756) | (10,133) |
Income tax | 0 | 299 | (5) |
Net loss | $ (4,022) | $ (7,457) | $ (10,138) |
Net loss per share: | |||
Net loss per share Basic | $ (0.6) | $ (2) | $ (3.9) |
Net loss per share Diluted | $ (0.6) | $ (2) | $ (3.9) |
Shares used in calculation of net income per share: | |||
Shares used in calculation of net income per share Basic | 6,762,038 | 3,691,226 | 2,619,810 |
Shares used in calculation of net income per share Diluted | 6,762,038 | 3,691,226 | 2,619,810 |
Product [Member] | |||
Revenues | |||
Total revenues | $ 19,767 | $ 10,100 | $ 4,475 |
Cost of revenues | |||
Total cost of revenues | 11,175 | 7,261 | 1,935 |
Service [Member] | |||
Revenues | |||
Total revenues | 6,803 | 7,549 | 7,792 |
Cost of revenues | |||
Total cost of revenues | $ 5,172 | $ 4,000 | $ 4,128 |
CONSOLIDATED STATEMENT OF CHANG
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock [Member] | Additional Paid in Capital [Member] | Accumulated deficit [Member] | Total |
Balance at Dec. 31, 2020 | $ 1,397 | $ 88,853 | $ (85,331) | $ 4,919 |
Balance, shares at Dec. 31, 2020 | 1,999,875 | |||
Conversion of loans | $ 627 | 8,934 | 9,561 | |
Conversion of loans (Shares) | 819,567 | |||
Exercise of options | $ 4 | 15 | 19 | |
Exercise of options (Shares) | 4,496 | |||
Share based compensation | 31 | 31 | ||
Net loss | (10,138) | (10,138) | ||
Balance at Dec. 31, 2021 | $ 2,028 | 97,833 | (95,469) | 4,392 |
Balance, shares at Dec. 31, 2021 | 2,823,938 | |||
Conversion of loans | $ 36 | 175 | 211 | |
Conversion of loans (Shares) | 54,396 | |||
Exercise of options | $ 1 | 1 | ||
Exercise of options (Shares) | 1,650 | |||
Share based compensation | 138 | 138 | ||
Share Issuance for a total consideration of issuance expenses | $ 992 | 4,854 | 5,846 | |
Share Issuance for a total consideration of issuance expenses (Shares) | 1,326,343 | |||
Net loss | (7,457) | (7,457) | ||
Balance at Dec. 31, 2022 | $ 3,057 | 103,000 | (102,926) | $ 3,131 |
Balance, shares at Dec. 31, 2022 | 4,206,327 | 4,206,327 | ||
Conversion of loans | $ 361 | 531 | $ 892 | |
Conversion of loans (Shares) | 518,644 | |||
Exercise of options and warrants | $ 718 | 2,574,451 | 3,292 | |
Exercise of options and warrants (Shares) | 1,081,250 | |||
Share based compensation | 243 | 243 | ||
Share Issuance for a total consideration of issuance expenses | $ 4,958 | (3,678) | 1,280 | |
Share Issuance for a total consideration of issuance expenses (Shares) | 7,484,820 | |||
Net loss | (4,022) | (4,022) | ||
Balance at Dec. 31, 2023 | $ 9,094 | $ 102,670 | $ (106,948) | $ 4,816 |
Balance, shares at Dec. 31, 2023 | 13,291,041 | 13,291,028 |
CONSOLIDATED STATEMENT OF CHA_2
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Total consideration | $ 1,393 | $ 6,389 |
Share issuance expenses | $ 113 | $ 543 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS - OPERATING ACTIVITIES | |||
Net loss | $ (4,022) | $ (7,457) | $ (10,138) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Accrued interest on loans | 2,148 | 2,360 | 4,470 |
Depreciation and amortization | 2,980 | 2,691 | 2,237 |
Stock-based compensation | 243 | 138 | 31 |
Decrease in deferred tax | 0 | (299) | 2 |
Change in Fair value of derivative warrants liability | (2,313) | 0 | 0 |
Credit Losses | 1,457 | 1,000 | 3,078 |
Inventory write-downs | 180 | 138 | (94) |
Decrease in accounts receivables, net | (4,135) | (791) | (1,712) |
Decrease (increase) in other current assets | 670 | (640) | (728) |
Decrease (increase) in inventories, net | 728 | 12 | (1,063) |
Increase (decrease) in accounts payables | 616 | (128) | (1,465) |
Increase (decrease) in employees and payroll accruals | (325) | (780) | (508) |
Increase (decrease) in accrued severance pay | (41) | 51 | (83) |
Lease liability | (604) | (436) | (275) |
Increase (decrease) in accrued expenses and other liabilities, related parties & deferred revenues | 51 | (513) | (3,449) |
Net cash used in operating activities | (2,367) | (4,654) | (9,697) |
CASH FLOWS - INVESTING ACTIVITIES | |||
Purchase of property and equipment | (1,714) | (524) | (949) |
Capitalization of software development costs | (1,652) | (1,613) | (743) |
Increase in severance pay fund | 0 | (52) | 0 |
Net cash used in investing activities | (3,366) | (2,189) | (1,692) |
CASH FLOWS - FINANCING ACTIVITIES | |||
Related parties | (68) | (4) | (1,577) |
Proceeds from loans and credit | 0 | 900 | 13,600 |
Proceeds from exercise of options and warrants, net | 1,819 | 0 | 19 |
Shares and warrants issuance, net | 5,054 | 5,848 | 0 |
Net cash provided by financing activities | 6,805 | 6,744 | 12,041 |
Increase (decrease) in cash, cash equivalents, and restricted cash | 1,072 | (99) | 652 |
Cash, cash equivalents, and restricted cash - beginning of year | 4,505 | 4,604 | 3,952 |
Cash, cash equivalents, and restricted cash - end of year | 5,577 | 4,505 | 4,604 |
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: | |||
Cash paid for taxes | 0 | 0 | 0 |
Cash paid for interest, net | 0 | 0 | 0 |
NON-CASH TRANSACTIONS: | |||
Conversion of loans and warrant into ordinary shares | $ 2,251 | $ 212 | $ 9,561 |
GENERAL
GENERAL | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
GENERAL | NOTE 1: GENERAL a. SuperCom Ltd. (the “Company”) is an Israeli resident company organized in 1988 in Israel. The Company’s ordinary shares were approved for listing on the NASDAQ Capital Market and began trading under the ticker symbol “SPCB” on September 17, 2013 The Company is a global provider of traditional and digital identity solutions, providing advanced safety, identification, tracking and security products to governments and organizations, both private and public, throughout the world. The Company provides cutting edge real-time positioning, tracking, monitoring and verification solutions enabled by its RFID &Mobile pure security advanced solutions suite of products and technologies, all connected to a web-based, secure, proprietary, interactive and user-friendly interface. The Company offers a wide range of solutions including, national ID registries, e-passports, biometric visas, automated fingerprint identification systems, digitized driver’s licenses, and electronic voter registration and election management using the common platform (“MAGNA”). The Company sells its products through marketing offices in the U.S, and Israel. b. During 2021 and 2022, The Company’s business, trading and operations were impacted materially by COVID-19. 2023 was a year of returning to normal as the Covid-19 global pandemic’s had no impact on our operations in Israel, USA and worldwide. Our sales, project operations and R&D processes have return to normal per our current business plan. While returning fully to our business plan, we have optimized the operations of our Company, and our operating costs except for our investment in R&D which continued to enhance our product offerings and competitive standing among our target markets, our optimized company generated numerous new opportunities and large project wins in our target markets, but required us to use resources in many cases that have yet to yield income to our Company as part of multi-year government sale and project deployment life cycles. c. Liquidity Analysis The Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and noted that as of December 31, 2023, the Company had cash, cash equivalent and restricted cash of $5,577 and positive working capital of $23,059. Additionally On March 30, 2023, the Company raised approximately $2.4 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 485,000 of its ordinary shares, and 1,032,615 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 1,517,615 of its ordinary shares at an exercise price of $1.66 per share. On August 3, 2023, the Company raised approximately $2.75 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 661,000 of its ordinary shares, and 2,574,295 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 3,235,295 of its ordinary shares at an exercise price of $0.85 per share. On November 15, 2023, the Company raised approximately $2.0 million in gross proceeds in a warrant exercise and reload with a single accredited institutional investor through warrant exercise of 1,081,000 warrant to ordinary shares, and warrant exercise of 3,671,910 warrant to pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent warrant reload to such Purchaser of the Company’s private warrants to purchase an aggregate of 9,505,820 of its ordinary shares at an exercise price of $0.5 per share. On April 19, 2024, the Company raised approximately $2.9 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 2,873,885of its ordinary shares, and 5,242,270 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 8,116,155 of its ordinary shares at an exercise price of $0.38 per share Furthermore, the available $6,000 in the secured credit facility from Fortress Investment Group may provide, under certain conditions, the Company additional access to capital if needed. The Company believes that based on the above-mentioned secured financings, management’s plans, maintaining the cost savings and expected cash streams from the Company’s current contracts with customers worldwide, it will be able to fund its operations for at least the next 12 months. d. Senior Secured Credit Facility and Subordinated Debt On September 6, 2018 and October 26, 2018, through a two-stage closing process, the Company entered into a Senior Secured Credit Facility with affiliates of Fortress Investment Group LLC("Fortress") with an aggregate principal amount of up to $20,000 (the "Credit Facility"). The Initial Term Loan which finalized on October 26, 2018 has an aggregate principal of $10,000, and the Incremental Term Loan provides for up to an additional $10,000 in principal through Incremental Draws of at least $1,000 each. In 2019, a total of $4,000 gross was drawn on the Incremental Term Loan, and some of the terms of the Credit Facility were amended to support the needs of the company. The Credit Facility bears interest on the borrowed balance at a rate per annum equal to LIBOR plus an applicable margin (the "Interest Margin") dependent on the EBITDA Leverage Ratio which is calculated and reset on a quarterly basis (8.0% for an EBITDA Leverage Ratio greater than or equal to 2.50x; 7.0% for an EBITDA Leverage Ratio less than 2.50x). At the Company's election, interest is paid in cash or in-kind in the amount of 4% per annum of the Interest Margin. The balance of interest is payable in cash monthly in arrears. For amounts which remain un-borrowed, the Company incurs interest at a rate of 0.50% per annum ("Unused Fee"). From closing and until today, the Company only paid monthly interest payments. The majority of the principal to be paid via a bullet payment at the maturity date, which the company expects to be amended to December 2028. As of December 31, 2023, the outstanding balance of the Credit Facility was $17,662 The Credit Facility is subject to an original issue discount equal to 2.5% of any drawn amounts, and amounts repaid cannot be re-borrowed. At maturity, an end-of-term fee of 2.25% to 4.5% is owed by the Company for any amounts drawn. In connection with securing the Credit Facility, the Company incurred legal and due diligence fees, which are recorded together with the original issue discount and end-of-term fee, and amortized into interest expense over the life of the Credit Facility. In connection with the Credit Facility, the Investor received 25,000 warrants initially and an additional 75,000 warrants for amendments (the “Credit Facility Warrants”) and purchased 106,705 unregistered common shares at a share price of $1.87 from the Company at a total of $200. The Credit Facility Warrants mature 7 years from the date of issuance, were set to be issued at a strike price at a premium to the then current market price. In 2021, the Company secured through the issuance of subordinated notes, gross proceeds of $12,000. For the consideration of $12,000 in gross proceeds, SuperCom issued to a certain institutional investor in February 2021 and June 2021, two-year unsecured, subordinated promissory notes in the amounts of $7,000 and $5,000, respectively, both with similar structures and terms. Given the subordination agreement between the senior secured loan investor, the subordinated debt investor and the Company, the subordinated investor may request that the balance of the subordinated debt be paid only after the senior secured Fortress debt is paid in full. The notes have a 5% annual coupon and a built-in increase to the balance of the notes by 5% every 6 months for the first 24 months, for any portion of the notes which has not been paid down prior to maturity. All principal and interest accrued is required to be paid in only one-bullet payment at maturity, and the company has the right to pre-pay any portion of either note at any time without a pre-payment penalty. The company has an option at its discretion only, at any time after 12 months to pay down all or a portion of either note using its ordinary shares, subject to certain conditions being met. During 2023, 2022 and 2021 the Company converted $500, $211 and $7,601, respectively, of the remaining principal and accrued interest of subordinated notes into the Company’s ordinary shares. The outstanding principal and accrued interest of the Subordinated Debt was $16,290. |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2: SIGNIFICANT ACCOUNTING POLICIES The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”). a. Use of estimates: The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions include (i) Revenue Recognition; (ii) Allowance for Doubtful Accounts; (iii) Deferred Income Taxes and (iv) measurement of the fair value of intangible assets and goodwill. b. Financial statements in U.S. dollars: Most of the revenues of the Company are received in U.S. dollars. In addition, a substantial portion of the costs of the Company are incurred in U.S. dollars. Therefore, management believes that the dollar is the currency of the primary economic environment in which the Company operate. Thus, the functional and reporting currency of the Company is the U.S. dollar. Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts denominated in currencies other than the dollar are re-measured into dollars in accordance with ASC No. 830, "Foreign Currency Matters". All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or financial expenses as appropriate. c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances were eliminated upon consolidation. Profits from intercompany sales, not yet realized outside the group, were also eliminated. d. Cash and cash equivalents: The Company considers unrestricted short-term highly liquid investments originally purchased with maturities of three months or less to be cash equivalents. The Company has not held any cash equivalents during 2023 and 2022. e. Restricted Cash: Restricted cash held in interest bearing saving accounts which are used as a security for the Company's Israeli facility leasehold bank guarantee, and as a security for ongoing terms of the contracts with existing customers and commercial tenders guarantees. f. Allowance for credit losses: The allowance for credit losses is determined with respect to specific amounts the Company has determined to be doubtful of collection. In determining the allowance for credit losses, the Company considers, among other things, its past experience with such customers and the information available regarding such customers. g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are mainly provided to cover risks arising from slow-moving items or technological obsolescence. Cost is determined for all types of inventory using the moving average cost method. h. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method, over the estimated useful lives, at the following annual rates: years Computers and peripheral equipment 3 Leased Products to Customers 5 Office furniture and equipment 5 - 17 Leasehold improvements Over the shorter of the term of the lease or the life of the asset i. Intangible assets: Intangible assets that are not considered to have an indefinite useful life are amortized using units of production and the straight-line basis over their estimated useful lives, as noted below. Recoverability of these assets is measured by a comparison of the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the assets. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. Intangible assets and their useful lives are as follows: Useful Life (in Years) Customers relationships & Other Between 4.5-13 (mainly 13) IP & Technology Between 4-15 (mainly 15) Capitalized software development costs 5 As of December 31, 2023, 2022 and 2021 no impairment losses were identified. Acquisition-related intangible assets: The Company accounts for its business combinations in accordance with ASC 805 “Business Combinations” and with ASC 350-20 “Goodwill and Other Intangible Assets” (“ASC 350-20”). ASC 805-10 specifies the accounting for business combinations and the criteria for recognizing and reporting intangible assets apart from goodwill. Acquisition-related intangible assets result from the Company’s acquisitions of businesses accounted for under the purchase method and consist of the value of identifiable intangible assets including developed software products, brand and patents, as well as goodwill. Goodwill is the amount by which the acquisition cost exceeds the fair values of identifiable acquired net assets on the date of purchase. Acquisition-related definite lived intangible assets are reported at cost, net of accumulated amortization. j. Goodwill: The Company’s goodwill reflects the excess of the consideration paid or transferred including the fair value of contingent consideration over the fair values of the identifiable net assets acquired. The goodwill impairment test is performed by evaluating an initial qualitative assessment of the likelihood of impairment. If this step indicates that the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the impairment test is performed. In step one of the impairment test, the Company compares the fair value of the reporting unit to the carrying value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. If the fair value is less than the carrying value of the reporting unit, then the second step of the impairment test is performed to measure the amount of the impairment. In the second step, the reporting unit’s fair value is allocated to all the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that simulates the business combination principles to derive an implied goodwill value. If the implied fair value of the reporting unit’s goodwill is less than its carrying value, the difference is recorded as impairment. For the years ended December 31, 2023 and 2022 the Company performed an annual impairment analysis and no impairment losses have been identified. k. Impairment of long-lived assets and intangible assets with definite useful life: The Company’s long-lived assets and intangible assets with definite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. l. Long lived assets held for sale: The company accounted for its long-lived assets held for sale under ASC 360-10 ("Impairment or disposal of Long-lived Assets"). Under management decision, the patents acquired under Alvarion Ltd. and Safend Ltd. acquisitions during 2016, were not intended for internal use by the Company. Management entered into engagements with several brokers for the purpose of marketing and sale of those patents. The Company classifies an asset group (an “asset”) as held for sale in the period during which (i) the Company has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be abandoned. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in operating loss for the period in which the held for sale criteria are met. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale. Realization costs of the patents are immaterial. For the years ended December 31, 2023 and 2022 the Company did not identify any triggers for impairment m. Accrued severance pay and severance pay fund: The liabilities of the Company for severance pay of its Israeli employees are calculated pursuant to Israel’s Severance Pay Law. Employees are entitled to one month’s salary for each year of employment, or portion thereof. The Company’s liability for all its employees is presented under “accrued severance pay”. The Company deposits on a monthly basis to defined contribution plans. A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes fixed payments to a fund administered by a separate and independent entity so that the Company has no legal or constructive obligation to pay additional contributions if such fund does not contain sufficient assets to pay all employees the benefits to which they may be entitled relating to employee service in the current and prior periods. The fund assets are not included in the Company’s consolidated balance sheets. n. Revenue recognition: The Company and its subsidiaries generate their revenues from the sale of products, licensing, maintenance, royalties and long-term contracts (including training and installation). The Company recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers The Company measures revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration the Company expect to receive in exchange for those services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. The Company evaluates whether a significant financing component exists when the Company recognizes revenue in advance of customer payments that occur over time. For example, some of the Company contracts include payment terms greater than one year from when we transfer control of goods and services to the Company customers and the receipt of the final payment for those goods and services. If a significant financing component exists, the Company classifies a portion of the transaction price as interest income, instead of recognizing all of the transaction price as revenue. The Company does not adjust the transaction price for the effects of financing if, at contract inception, the period between the transfer of control to a customer and final payment is expected to be one year or less. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price based on management’s judgement. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Nature of goods and services The following is a description of the Company’s goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: Software Maintenance and Support Services Revenue Software maintenance and support services contracts are sold in conjunction with the Company’s software products for its e-Gov, IoT and Connectivity, and Cyber Security revenue streams. The contract terms for software maintenance and support span one five The Company recognizes revenue from fixed-price service and maintenance contracts using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts toward satisfying a performance obligation. The Company recognizes revenue from maintenance and support services provided pursuant to the time elapsed under such contracts, as that is when the performance obligation to the Company customers under such arrangements is fulfilled. Perpetual Software License Revenue The Company generates revenue from the sales of perpetual software licenses for its Cyber Security and e-Gov segments, including sales for its Magna_DL, Magna_VL, Magna_Passport, and Magna_ID software products. The intellectual property rights for usage of these products are transferred to the customer at the time of purchase and the software does not require implementation services, ongoing maintenance and support, or other adaptions in order to maintain utility. In arrangements where ongoing services are not essential to the functionality of the delivered software, the Company recognizes perpetual software license revenue when the license agreement has been approved and the software has been delivered. The Company can identify each party’s rights, payment terms, and commercial substance of the content. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the adjusted market assessment approach. Annual Software License Revenue The Company generates revenue from the sales of time-based software licenses for certain of its software products. The intellectual property rights for access to these products are transferred to the customer for contract terms of one year and the software requires ongoing maintenance, support, or other adaptions in order to maintain utility. The Company recognizes revenue over time using the input method for its annual software licenses when ongoing services are determined to be essential to the functionality of the delivered software. The license along with the any customization services are transferred to the Company customers pursuant to the time elapsed under such contracts, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. System Design Revenue System design revenue relate to services provided to governments and national agencies in the early stages of a new project including incumbent system data information extraction, customer interviewing and specification mapping, architecture and software design, secure credential design, project management and planning, data migration design, project operation planning, training, assimilation, and operational processes optimization for the Company’s e-Gov and IoT solutions. The Company recognizes revenue from its system design services using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from system design services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the expected cost plus a margin approach. Implementation and System Deployment Revenue Implementation and system deployment revenue relate to services provided to governments and national agencies typically after the design stage is concluded including infrastructure setup and deployment, software and chip design development, software customizations, purchase, and deployment of hardware and necessary system components, system integration and implementation, process engineering, customer training, system quality assurance testing, load balancing and local environment optimizations, and operational system launch for the Company’s e-Gov and IoT solutions. The Company recognizes revenue from its implementation and system deployment revenue using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from implementation and system deployment services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the residual approach. Procurement of Secure Document Consumables Revenue The Company procures secure document consumables for its e-Gov government customers which are needed to issue secure documents after a project deployment is complete and a system in actively running and operational. These consumables are manufactured generally at secure printing facilities utilizing proprietary and customized designs, which the Company has developed during the project design stage, to provide multiple layers of security preventing falsification of documents. These consumables include base card stock, security laminates, holograms, passive RFID chip inlays, passport booklets, secure chip cards, and various other secure credentialing necessities. The Company recognizes revenue on procurement of secure document consumables products when the customer has control of the product, which is determined to be at the point in time when the products are delivered. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their stated prices within the contract. Wireless & RFID Products Revenue The Company’s wireless products include solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses and connected events which enhance productivity and performance. The Company’s RFID products include asset tags which provide real-time asset loss prevention, inventory management, and personnel/asset tracking and vehicle tags which provide long-range vehicle ID for parking and fleet management, access control, asset loss prevention at airports, gated communities, truck and bus terminals, employee parking lots, hospitals, industrial facilities, railroads, mines and military installations. The Company recognizes revenue on wireless and RFID products when the customer has control of the equipment, which is determined to be at the point in time when the products are shipped. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their stated prices within the contract. Electronic Monitoring Services Revenue Electronic monitoring services represent fees the Company collects through the sale or rental of its PureSecurity Suite of products, which include the PureMonitor, PureTrack, PureTag, PureCom, PureBeacon, and SCRAM devices. These devices identify, track, and monitor people or objects in real time through the Company’s GPS monitoring, home monitoring, and alcohol tracking solutions. The Company recognizes revenue on the sale of electronic monitoring products when the customer has control of the equipment, which is determined to be at the point in time when the products are shipped. For devices which are rented and for electronic monitoring services provided, the Company recognizes revenue pursuant to the time elapsed for such contracts, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. The Company customers typically pay for these services based on a net rate per day per individual or on a fixed monthly rate. Treatment Services Revenue Treatment services revenue is an extension of the Company’s electronic monitoring services. The Company provides individuals who have completed or are near the end of their sentence with the resources necessary to productively transition back into society. Through the Company daily reporting centers, we provide criminal justice programs and reentry services to help reduce recidivism which include case management, substance abuse education, vocational training, parental support, employment readiness and job placement. These activities are considered to be a bundle of services which are a part of a series of distinct services recognized over time. The Company recognizes revenue from its treatment services using the input method of accounting. Under the input method, revenue is recognized revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from implementation and system deployment services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identify multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the expected cost plus a margin approach. Professional Services Revenue The Company offers professional services for the Company’s Cyber Security software products, which includes an on-site / remote visit by a specialist technician to assist with installation, deployment and configuration. The Company recognizes revenue from professional services upon completion of the service performed for the customer. As these services are completed during a single onsite visit, revenue is recognized at a point in time of such onsite visit. Disaggregation of revenue In the following table, revenue is disaggregated by major geographic region and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: Year ended December 31, 2023 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,455 $ 1,455 European countries 328 17,256 89 17,673 South America 12 - - 12 United States 279 6,487 - 6,766 Israel 562 23 - 585 APAC 79 - - 79 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Timing of revenue recognition Products and services transferred over time $ 343 $ 8,262 $ 1455 $ 10,060 Products transferred at a point in time 917 15,504 89 16,510 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Year ended December 31, 2022 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 374 $ 374 European countries 273 9,023 263 9,559 South America - - - - United States 351 6,526 - 6,877 Israel 614 79 - 693 APAC 146 - - 146 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Timing of revenue recognition Products and services transferred over time $ 498 $ 11,697 $ 335 $ 12,530 Products transferred at a point in time 886 3,931 302 5,119 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Year ended December 31, 2021 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,586 $ 1,586 European countries 527 2,242 143 2,912 South America 1 36 - 37 United States 410 6,410 - 6,820 Israel 648 109 - 757 APAC 48 107 - 155 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 Timing of revenue recognition Products and services transferred over time $ 44 $ 7,176 $ 1,428 $ 8,648 Products transferred at a point in time 1,590 1,728 301 3,619 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 Transaction price allocated to the remaining performance obligations Remaining performance obligations represent the transaction price of system deployment, service and maintenance contracts for which work has not been performed as of the period end date. As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance totals $19.56 million. The Company expects approximately 68% of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 32% recognized thereafter. The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. We apply the transition practical expedient in paragraph ASC 606-10-65-1(f)(3) and do not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Company expects to recognize that amount as revenue. Additionally, applying the practical expedient in paragraph ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts (i.e., commissions) as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one-year or less. o. Research and development costs and software development costs: Research and development costs are expensed as incurred. Software development costs eligible for capitalization are accounted for in accordance with 985-20 Software - Costs of Software to be Sold, Leased or Marketed. Capitalization of software development costs for products to be sold to third parties begins upon the establishment of technological feasibility and ceases when the product is available for general release. Amortization is calculated and provided over the estimated economic life of the software, using the greater of (i) straight-line method or if applicable (ii) the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product. Amortization commences when developed software is available for general release to clients. The estimated useful life of capitalized software development costs is 5 years. p. Income taxes: The Company and its subsidiaries account for income taxes in accordance with ASC Topic 740, “Income Taxes”. This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws, that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition and measurement threshold. The Company’s accounting policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not recognize such items in its fiscal 2023 and 2022 financial statements. q. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash deposits and trade receivables. The Company’s trade receivables are derived from sales to customers located primarily in Europe, Africa, the United States and South America. The Company performs ongoing credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is determined with respect to specific debts that the Company has determined to be doubtful of collection. Cash and cash equivalents and restricted cash deposits are deposited with major banks in Israel and the United States. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company has no significant off-balance-sheet concentration of credit risk. r. Concentrations of suppliers: The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results s. Basic and diluted earnings per share: Basic earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year, plus the dilutive potential of stock opti |
OTHER CURRENT ASSETS
OTHER CURRENT ASSETS | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
OTHER CURRENT ASSETS | NOTE 3: OTHER CURRENT ASSETS December 31, 2023 2022 Prepaid expenses $ 133 $ 224 Advances to suppliers 337 337 Government institutions 479 740 Guaranty held by customer 662 621 Other 131 317 $ 1,742 $ 2,239 |
INVENTORIES, NET
INVENTORIES, NET | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES, NET | NOTE 4: INVENTORIES, NET December 31, 2023 2022 Raw materials, parts and supplies $ 1,380 $ 1,726 Finished products 1,123 1,685 $ 2,503 $ 3,411 As of December 31, 2023 and 2022, inventory is presented net of write offs for slow inventory in the amount of approximately $2,395 and $2,215, respectively. |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5: PROPERTY AND EQUIPMENT, NET December 31, 2023 2022 Cost: Computers and peripheral equipment $ 3,390 $ 3,206 Office furniture and equipment 852 852 Trade Equipment 42 42 Leasehold improvements 210 210 Equipment held by customer 4,420 2,890 8,914 7,200 Accumulated depreciation: Computers and peripheral equipment 2,990 2,855 Office furniture and equipment 785 760 Trade Equipment 42 39 Leasehold improvements 206 198 Equipment held by customer 2,190 1,708 6,213 5,560 Depreciated cost $ 2,701 $ 1,640 Purchasing of Equipment for the years ended December 31, 2023 and 2022, were $1,714 and $524, respectively. Depreciation expenses for the years ended December 31, 2023 and 2022, were $653 and $688, respectively. |
INTANGIBLE ASSETS, NET
INTANGIBLE ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS, NET | NOTE 6: INTANGIBLE ASSETS, NET Other intangible assets consisted of the following: December 31, 2023 December 31, 2022 Carrying Amount Accumulated Amortization Net Book Value Carrying Amount Accumulated Amortization Net Book Value Customers relationships & Other $ 8,734 $ 8,427 $ 307 $ 8,734 $ 8,112 $ 622 IP & Technology 7,019 5,252 1,767 7,019 4,898 2,121 Capitalized software development costs 11,266 7,764 3,502 9,614 6,740 2,874 $ 27,019 $ 21,443 $ 5,576 $ 25,367 $ 19,750 $ 5,617 Amortization expenses amounted to $1,693, 1,607 and $1396 for the years ended December 31, 2023, 2022 and 2021, respectively. |
OTHER LONG-TERM ASSETS, NET
OTHER LONG-TERM ASSETS, NET | 12 Months Ended |
Dec. 31, 2023 | |
Other Long Term Assets [Abstract] | |
OTHER LONG-TERM ASSETS, NET | NOTE 7: OTHER LONG-TERM ASSETS, NET December 31, 2023 2022 Severance pay funds $ - $ 482 Deferred tax long term 501 501 Operating lease right-of-use asset 487 484 $ 988 $ 1,467 |
ACCRUED EXPENSES AND OTHER LIAB
ACCRUED EXPENSES AND OTHER LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
ACCRUED EXPENSES AND OTHER LIABILITIES | NOTE 8: ACCRUED EXPENSES AND OTHER LIABILITIES December 31, 2023 2022 Accrued management services $ 86 $ 86 Professional services 207 202 Other accrued expenses 192 181 $ 485 $ 469 |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 9: LEASES We do not own any real estate. We lease approximately 1,139 square meters of office and warehousing premises in Tel Aviv and Herzliya, Israel, under a new lease which started on April l We lease approximately 1,701 square meters of office premises in California, Kentucky and Miami for our U.S. subsidiaries, which under the current lease contracts expire gradually by 2025, with a monthly fee of approximately $27 for 2023. Year ended December 31, 2023 2022 The components of lease expense were as follows: Operating leases expenses $ 701 $ 475 Cash flow information related to operating leases: Cash used in operating activities $ 694 $ 502 Non-cash activity - Right of use assets obtained in exchange for new operating lease liabilities $ 652 $ - December 31, 2023 2022 Supplemental information related to operating leases, including location of amounts reported in the accompanying consolidated balance sheets, follows: Other assets - Right-of-Use assets $ 1,824 $ 1,200 Accumulated amortization 1,337 716 Operating lease Right-of-Use assets, net $ 487 $ 484 Lease liabilities – current - accrued expenses and other liabilities $ 401 $ 381 Lease liabilities – noncurrent 108 108 Total operating lease liabilities $ 509 $ 489 Weighted average remaining lease term in years 2.25 Weighted average annual discount rate 9 % Future minimum lease commitments under non-cancelable operating leases for the years ended December 31, 2023, are as follows: 2024 437 2025 110 Total operating lease payments 547 Less: imputed interest (38 ) Present value of lease Liabilities $ 509 |
WARRANTS LIABILITY
WARRANTS LIABILITY | 12 Months Ended |
Dec. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
WARRANTS LIABILITY | NOTE 10: WARRANTS LIABILITY Issued to investors December 31, 2023 2022 Outstanding at January 1 $ - $ - Issued to investors 3,786 - Exercised (1,473 ) - Changes in fair value (2,313 ) - Outstanding at December 31 $ - $ - See note 14 for additional information. |
OTHER LONG-TERM LIABILITIES
OTHER LONG-TERM LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
OTHER LONG-TERM LIABILITIES | NOTE 11: OTHER LONG-TERM LIABILITIES December 31, 2023 2022 Deferred revenues $ 305 $ 269 Deferred tax liability 170 170 Accrued severance pay - 523 Long- term operating lease liabilities 108 108 $ 583 $ 1,070 |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENT LIABILITIES | NOTE 12: COMMITMENTS AND CONTINGENT LIABILITIES a. Guarantees, indemnity and liens: 1. The Company and its subsidiaries issued bank guaranties in the total amount of approximately $350 as a part of the ongoing terms of lease contracts, contracts with existing customers and for tenders. 2. Under the Fortress Agreement, the Company recorded a fix floating charge on all of the Company’s assets in favor of the Fortress, limited in amount, in order to secure long-term loan granted by them in favor of the Company. b. The Company is party to legal proceedings in the normal course of our business. There are no material pending legal proceedings to which the Company is a party or of which our property is subject. Although the outcome of claims and lawsuits against the Company cannot be accurately predicted, we do not believe that any of the claims and lawsuits, will have a material adverse effect on the Company business, financial condition, results of operations or cash flows for any quarterly or annual period. c. On January 19, 2024, pursuant to an agreement with Sabby to fully settle the actions between the parties, which were pending in the Supreme Court of New York, New York County, the Company issued to Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) 1,475,142 of the Company’s ordinary shares (the “Shares”), par value NIS 2.5 per share (the “Ordinary Shares”), 4,250,000 two-year warrants to purchase Ordinary Shares with an exercise price of $0.45 per share (the “Warrants”), and 5,524,858 pre-funded warrants to purchase Ordinary Shares with an exercise price of $0.00001 per share (the “Pre-Funded Warrants” and collectively with the Shares. |
INCOME TAX
INCOME TAX | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAX | NOTE 13: INCOME TAX a. The Corporate tax rate in Israel in 2023 and 2022 was 23%. b. Our USA subsidiaries were subject to federal tax rate of 21% in 2023 and 2022, state tax of 8.84% in CA and 6.5% in NY, and city tax of 6.5% in New York City c. Deferred income taxes: Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the deferred tax assets of the Company and its subsidiaries are as follows: December 31, 2023 2022 Operating loss carry forwards $ 24,106 $ 21,362 Reserves and allowances 4,939 4,475 Net deferred tax assets before valuation allowance 29,045 25,837 Valuation allowance (28,622 ) (25,414 ) Net deferred tax assets 423 423 Deferred income taxes consist of the following: Domestic 21,234 20,867 Valuation allowance (20,811 ) (20,444 ) Net deferred tax assets 423 423 Foreign 7,811 4,970 Valuation allowance (7,811 ) (4,970 ) $ - $ - As of December 31, 2023, the Company and its subsidiaries, have provided a valuation allowance of $24,106 in respect of deferred tax assets resulting from tax loss carryforwards and other temporary differences. Other tax loss carryforwards and temporary differences in the amount of $423 were not provided with valuation allowance as the Company’s management currently believes that these tax assets are more likely than not to be recovered. d. Carryforward tax losses: As of December 31, 2023, SuperCom Ltd and its subsidiaries in Israel have accumulated losses for tax purposes of approximately $74,569, which may be carried forward and offset against taxable income in the future for an indefinite period. SuperCom Ltd. also has a capital loss of approximately $14,651, which may be carried forward and offset against capital gains for an indefinite period. Loss carryforwards in Israel are measured in NIS. As of December 31, 2023, SuperCom’ s subsidiaries in the United States have estimated total available carryforward tax losses of approximately $25,734. Utilization of the U.S. net operating losses may be subject to substantial annual limitation due to the "change in ownership" provisions of the Internal Revenue Code of 1986 and similar state provisions. The annual limitation may result in the expiration of net operating losses before utilization. SuperCom Ltd has assessments which are considered as final until the tax year ended December 31, 2018. SuperCom’s subsidiaries in the United States and Israel have not received final assessments since their incorporation. e. loss before income tax consists of the following: Year ended December 31, 2023 2022 2021 Domestic $ (1,880 ) $ (7,013 ) (10,616 ) Foreign (2,142 ) (743 ) 483 $ (4,022 ) $ (7,756 ) (10,133 ) Substantially, all tax expenses are as a result of changes in deferred taxes. f. Reconciliation of the theoretical tax benefit to the actual tax benefit: A reconciliation of theoretical tax expense, assuming all income is taxed at the statutory rate applicable to the income of companies in Israel, and the actual tax expense (benefit), is as follows: Year ended December 31, 2023 2022 2021 Loss before income tax, as reported in the consolidated statements of operations $ (4,022 ) $ (7,756 ) (10,133 ) Statutory tax rate in Israel 23 % 23 % 23 % Theoretical tax benefit (925 ) (1,784 ) (2,331 ) Changes in valuation allowance 943 1185 1,438 Changes in foreign currency exchange rate and other differences 576 481 788 Non-deductible expenses and other differences (594 ) (181 ) (110 ) Actual income tax expense (benefit) $ - $ (299 ) 5 |
SHARE CAPITAL
SHARE CAPITAL | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders' Equity Note [Abstract] | |
SHARE CAPITAL | NOTE 14: SHARE CAPITAL a. The Company’s ordinary shares are quoted under the symbol “SPCB” on the NASDAQ Capital Market in the United States. b. Shareholders’ rights: The ordinary shares confer upon the holders the right to receive notice to participate and vote in the general meetings of the Company, and the right to receive dividends, if declared. c. On March 30, 2023, the Company raised approximately $2.4 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 485,000 of its ordinary shares, and 1,032,615 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 1,517,615 of its ordinary shares at an exercise price of $1.66 per share. On June 06, 2023, 440,615 prefunded warrants were converted into 440,615 ordinary shares. On July 28, 2023, 435,000 prefunded warrants were converted into 435,000 ordinary shares. On August 3, 2023 the exercise price of the Company’s private warrants was reduced to $0.85. On August 1, 2023, 157,000 prefunded warrants were converted into 157,000 ordinary shares. The Company’s private warrants issue on March 30,2023, were classified as a financial liability because of the repurchase provisions of such warrants that permitted the holders of such warrants, in the event of a fundamental transaction, to receive a cash consideration that is not the same as the consideration payable to the common stockholders (see also Note 10). The Company used the Black-Scholes valuation model to estimate fair value of these warrants. In using this model, the Company made certain assumptions about risk-free interest rates, dividend yields, expected stock price volatility, expected term of the warrants and other assumptions. Expected volatility was calculated based upon historical volatility of the Company. Risk-free interest rates are derived from the yield on U.S. Treasury debt securities. Dividend yields are based on historical dividend payments, which have been zero to date. The expected term of the warrants is based on the time to expiration of the warrants from the measurement date. Issuance expenses totaled $188, of which $126 were allocated to the derivative warrant liabilities and were immediately expensed, and $62 were allocated to the ordinary shares and to the prefunded warrants that were classified as equity and accordingly were reduced from additional paid-in capital. The following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities issued on March 30,2023 on issuance date and on exercise date: March 30, November 15, 2023 2023 Risk-free interest rate 3.60 % 4.57 % Dividend yield 0 % 0 % Volatility factor 100 % 116 % Expected life of the options 5.00 4.38 d. On August 3, 2023, the Company raised approximately $2.75 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 661,000 of its ordinary shares, and 2,574,295 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share, and concurrent private placement to such Purchaser of the Company’s private warrants to purchase an aggregate of 3,235,295 of its ordinary shares at an exercise price of $0.85 per share. On September 15, 2023, 765,295 prefunded warrants were converted into 765,295 ordinary shares. On October 10, 2023, 1,809,000 prefunded warrants were converted into 1,809,000 ordinary shares. The Company’s private warrants issue on August 3, 2023, were classified as a financial liability because of the repurchase provisions of such warrants that permitted the holders of such warrants, in the event of a fundamental transaction, to receive a cash consideration that is not the same as the consideration payable to the common stockholders (see also Note 10). Issuance expenses totaled $235, of which $185 were allocated to the derivative warrant liabilities and were immediately expensed, and $50 were allocated to the ordinary shares and to the prefunded warrants that were classified as equity and accordingly were reduced from additional paid-in capital. The Company used the Black-Scholes valuation model to estimate fair value of these warrants. The following table summarizes the observable inputs used in the valuation of the derivative warrant liabilities issued on August 3, 2023 on issuance date and on exercise date: August 3, November 15, 2023 2023 Risk-free interest rate 4.30 % 4.54 % Dividend yield 0 % 0 % Volatility factor 98 % 113 % Expected life of the options 5.00 4.72 e. On November 15, 2023, the exercise price of all private warrants issued on March 30,2023 and August 3, 2023, a total of 4,752,910 private warrants, was reduced to $0.42. Subsequently all 4,752,910 private warrants were exercised into 1,081,000 ordinary shares and 3,671,910 pre-funded warrants to purchase ordinary shares with an exercise price of $0.00001 per share. Upon conversion of all 4,752,910 private warrants at $0.42 by the holders, the holders were entitled to receive private warrants to purchase an aggregate of 9,505,820 of its ordinary shares (200% warrants) for 5.5 years at an exercise price of $0.5. The total consideration of approximately $2.0 million in gross proceeds was classified to equity, accordingly $177 of issuance expenses were allocated to equity and reduced from additional paid-in capital. On November 20, 2023, 2,731,910 prefunded warrants, out of the 3,671,910 issued, were converted into 2,731,910 ordinary shares. The remaining 940,000 prefunded warrants remained outstanding as of December 31, 2023. f. During 2023 the Company converted $500 of the remaining principal and accrued interest of short-term loans issued in 2022 into 518,644 of the Company’s ordinary shares. g. Stock options: 1. In 2003, the Company adopted a stock option plan under which the Company issues stock options (the “Option Plan”). The Option Plan is intended to provide incentives to the Company’s employees, officers, directors and/or consultants by providing them with the opportunity to purchase ordinary shares of the Company. Options granted under the Option Plan will become exercisable ratably over a period of three to five years or immediately in certain circumstances, commencing with the date of grant. The options generally expire no later than 10 years from the date of grant. Any options which are forfeited or canceled before expiration become available for future grants. 1 million Ordinary Shares are authorized for issuance under the 2003 Option Plan, of which 171,250 shares were available for future grant as of December 31, 2023. In 2007 a new option plan was approved under which the Company may grant stock options to the U.S. employees of the Company and its subsidiaries (the “2007 Option Plan”). Under the 2007 Option Plan, the Company may grant both qualified (for preferential tax treatment) and non-qualified stock options. In June 2013, the Option Plan was extended for another period of ten years, until December 31, 2023. In April 2023, the Option Plan was extended for another period of ten years, until December 31, 2033. During the years 2019, 2020 and 2021, the Company did not grant any option to purchase shares. During the year 2022, the Company granted 800,937 option to purchase ordinary shares to certain officers and employees of the Company. During the year 2023, the Company granted 22,000 option to purchase ordinary shares to certain employees of the Company. 2. A summary of the Company’s stock option activity and related information is as follows: The estimated fair value of stock option awards was determined on the date of grant using the Black-Scholes option valuation model with the following weighted-average assumptions during the periods indicated: Year ended December 31, 2023 2022 Weighted Average Risk-free interest rate 3.84 % 2.84 % Dividend yield 0 % 0 % Weighted Average Volatility factor 91 % 74 % Weighted Average Expected life of the options 4.53 6.64 The expected volatility was based on the historical volatility of the Company’s stock. The expected term was based on the historical experience and based on Management estimate. The following table contains additional information concerning options granted under the existing stock--option plan: Year ended December 31 2023 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at Beginning of year 811,050 $ 3.58 21,388 $ 12.3 33,484 $ 23.1 Granted 22,000 $ 1.23 800,937 $ 3.25 - $ - Exercised (250 ) $ 1.00 (1,650 ) $ 1.00 (4,496 ) $ 4.1 Canceled and forfeited (10,625 ) $ 4.17 (9,625 ) $ 3.79 (7,600 ) $ 22.2 Outstanding at end of year 822,175 $ 3.51 811,050 $ 3.58 21,388 $ 12.3 Exercisable at end of year 416,975 $ 3.80 213,597 $ 4.15 15,950 $ 12.8 A summary of the Company’s non-vested options granted to employees is presented below : Year ended December 31 2023 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at Beginning of year 597,453 $ 3.51 5,438 $ 10.7 14,175 $ 16.4 Granted 22,000 $ 1.23 800,937 $ 3.25 - $ - Vested (204,978 ) $ 3.46 (199,297 ) $ 3.94 (5,437 ) $ 10.7 Canceled and forfeited (9,275 ) $ 3.68 (9,625 ) $ 3.79 (3,300 ) $ 35.2 Non-vested as of December 31, 2023 405,200 $ 3.20 597,453 $ 3.51 5,438 $ 10.7 As of December 31, 2023, there was $539 of unrecognized compensation cost related to non-vested stock-based compensation arrangements granted under the stock option plans, to be recognized over a weighted average period of approximately 2.66 years. The following table summarizes the allocation of the stock-based compensation: Year ended December 31, 2023 2022 2021 Cost of revenues $ 13 $ 17 $ 7 Research and development expenses 95 67 12 Selling and marketing expenses 7 7 7 General and administrative expenses 128 47 5 $ 243 $ 138 $ 31 The options outstanding and exercisable as of December 31, 2023, have been separated into ranges of exercise prices as follows: Options outstanding Options Exercisable Number outstanding Weighted average remaining contractual life (years) Exercise price Aggregate intrinsic value Number outstanding Weighted average remaining contractual life (years) Aggregate intrinsic value 8,188 5.26 $ 1.00 $ - 8,188 5.26 $ - 16,350 7.32 $ 1.23 $ - 2,700 6.55 $ - 763,000 5.68 $ 3.25 $ - 373,500 5.66 $ - 25,387 5.22 $ 7.50 $ - 23,337 5.16 $ - 9,250 5.07 $ 20.00 $ - 9,250 5.07 $ - 822,175 $ - 416,975 $ - The total intrinsic value of options exercised for the years ended December 31, 2023 and 2022 was $1 and $7, respectively. h. Warrants: Each of the Company's warrants entitles the holder to exercise such warrant for one ordinary share and does not confer upon such holder any rights as an ordinary shareholder until such holder exercises such holder’s warrants and acquires the Ordinary Shares. All Company warrants outstanding as of December 31, 2023 are classified as a component of shareholders’ equity because such warrants are free standing financial instruments that are legally detachable, separately exercisable, do not embody an obligation for the Company to repurchase its own shares, and permit the holders to receive a fixed number of Ordinary Shares upon exercise, requires physical settlement and do not provide any guarantee of value or return. The following table contains additional information concerning warrants activity for the years 2023 and 2022: Year ended December 31 2023 2022 2021 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding at Beginning of year 901,869 $ 10.06 247,000 $ 17.07 247,000 $ 17.07 Issued 9,505,820 $ 0.5 1,219,738 $ 4.96 - $ - Exercised 654,869 $ 3.20 564,869 $ 3.08 - $ - Expired - $ - - $ - - $ - Outstanding at end of year 9,752,830 $ 0.91 901,869 $ 10.06 247,000 $ 17.07 Set forth below is data regarding the range of exercise prices and expiration date for warrants outstanding at December 31, 2023: Exercise Price Number of warrants Outstanding Exercisable until $ 18.70 2,500 2025 $ 7.50 7,500 2026 $ 17.07 237,000 2027 $ 0.50 9,505,820 2029 9,752,820 i. Dividends: No dividends were declared in the reported periods. In the event that cash dividends are declared in the future, such dividends will be paid in NIS. The Company does not intend to distribute cash dividends in the foreseeable future. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 15: RELATED PARTY TRANSACTIONS a. Mr. Trabelsi has served as the chief executive officer of the Company since June 1, 2012 until February 21, 2022. Mr. Trabelsi is the sole director of Sigma Wave, which is the controlling shareholder of the Company. On May 9, 2013, the general meeting of shareholders of the Company approved the payment of management fees to Mr. Trabelsi of $10.6 per month plus social benefits and an annual bonus of the greater of 2% of the Company’s annual net profit or 0.5% of annual revenues, but in no event greater than Mr. Trabelsi’s annual salary. b. As of December 31, 2023 and 2022, the Company accrued $86 and $86, respectively as expenses arising from related party management services. c. On April 29, 2012, the Board of Directors approved the recording of a floating charge on all of the Company’s assets in favor of the Mr. and Mrs. Trabelsi, unlimited in amount, in order to secure personal guarantees granted by them in favor of the Company to a bank and in order to secure loans that are given by them from time to time to the Company. As of December 31,2023, total loans were $100. These loans bear no interest and are not attached to any price index. |
SEGMENTS, MAJOR CUSTOMERS AND G
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION | NOTE 16: SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION a. Summary information about segments: ASC 280, Segment Reporting, establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. The Company’s chief operating decision maker is its Chief Executive Officer. The company operates in three technologies segments or Strategic business units; e-Gov, IoT, and Cyber Security: e-Gov: Through the Company proprietary e-Government platforms and innovative solutions for traditional and biometrics enrollment, personalization, issuance and border control services, the Company has helped governments and national agencies design and issue secured multi-identification, or Multi-ID, documents and robust digital identity solutions to their citizens, visitors and Lands. IoT: The Company’s IoT products and solutions reliably identify, track and monitor people or objects in real time, enabling the customers to detect unauthorized movement of people, vehicles and other monitored objects. The Company provides all-in-one field proven IoT suite, accompanied with services specifically tailored to meet the requirements of an IoT solutions. The Company’s proprietary IoT suite of hybrid hardware, connectivity and software components are the foundation of these solutions and services. Cyber Security: The Company operates in the fields of cutting-edge endpoint data protection guarding against corporate data loss and theft through content discovery and inspection, encryption methodologies, and comprehensive device and port control and cyber security services. Year ended December 31, 2023 Cyber Security IoT e-Gov Total Revenues $ 1,260 $ 23,766 $ 1,544 $ 26,570 Operating Income (Loss) 524 (99 ) (3,676 ) (3,359 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 8 $ 2,519 $ 174 $ 2,701 Year ended December 31, 2022 Cyber Security IoT e-Gov Total Revenues $ 1,384 $ 15,628 $ 637 $ 17,649 Operating loss 680 (3,993 ) (2,692 ) (6,005 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 30 $ 1,590 $ 50 $ 1,640 Year ended December 31, 2021 Cyber Security IoT e-Gov Total Revenues $ 1,634 $ 8,904 $ 1,729 $ 12,267 Operating loss 400 (3,004 ) (4,133 ) (6,737 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 47 $ 1,543 $ 214 $ 1,804 Following is a reconciliation of the operating income (loss) of the reportable segments to the data included in the statements of operations: Year ended December 31, 2023 2022 2021 Operating loss Total operating loss of reportable segments $ (3,359 ) $ (6,005 ) (6,737 ) Financial expenses, net (663 ) (1,751 ) (3,396 ) Loss before income taxes $ (4,022 ) $ (7,756 ) (10,133 ) b. Summary information about geographic areas: The following is a summary of revenues from external customers of the continued operations within geographic areas and data regarding property and equipment, net: Year ended December 31, 2023 2022 2021 Total Revenues Property and Equipment, net Total revenues Property and Equipment, net Revenues Property and Equipment, net Africa $ 1,455 $ - $ 374 $ - $ 1,586 - European countries 17,673 - 9,559 - 2,912 - South America 12 - - - 37 - United States 6,766 21 6,877 38 6,820 47 Israel 585 2,680 693 1,602 757 1,757 APAC 79 - 146 - 155 - $ 26,570 $ 2,701 $ 17,649 $ 1,640 $ 12,267 1,804 - Revenues were attributed to countries based on the customer’s location. - Property and equipment were classified based on geographic areas in which such property and equipment items are held. c. Summary of revenues from external customers based on products and services: Year ended December 31, 2023 2022 2021 Raw materials and equipment $ 2,841 $ 302 1,119 Electronic monitoring 17,819 11,614 6,393 Treatment programs 4,538 3,998 3,292 Maintenance, royalties and project management 1,372 1,735 1,463 $ 26,570 $ 17,649 12,267 d. Major customer data as a percentage of total sales: Year ended December 31, 2023 2022 2021 Customer A 50 % 36 % - Customer B 9 % - 10 % 59 % 36 % 10 % |
OTHER EXPENSE, NET
OTHER EXPENSE, NET | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
OTHER EXPENSE, NET | NOTE 17: OTHER EXPENSE, NET Year ended December 31, 2023 2022 2021 Credit losses $ 1,457 $ 1,000 $ 3,000 Other 1,355 138 1,374 Total other expense, net $ 2,812 $ 1,138 $ 4,374 Credit losses provision. The following is a summary of the accounts receivables allowance for credit losses for the years ended December 31: Year ended December 31, 2023 2022 2021 Balance at beginning of period $ 12,667 $ 11,667 $ 8,667 Provision during the period 1,457 1,000 3,000 Balance at end of period $ 14,124 $ 12,667 $ 11,667 |
FINANCIAL EXPENSES, NET
FINANCIAL EXPENSES, NET | 12 Months Ended |
Dec. 31, 2023 | |
Nonoperating Income (Expense) [Abstract] | |
FINANCIAL EXPENSES, NET | NOTE 18: FINANCIAL EXPENSES, NET Year ended December 31, 2023 2022 2021 Interest, bank charges and fees $ (2,512 ) $ (1,770 ) $ (3,642 ) Change in Fair value of derivative warrants liabilities 2,313 - - Exchange differences, net (464 ) 19 246 Total financial expenses, net $ (663 ) $ (1,751 ) $ (3,396 ) |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 19: SUBSEQUENT EVENTS. On January 8, 2024, 940,000 prefunded warrants were converted into ordinary shares. On January 19, 2024, the Company issued to Sabby Volatility Warrant Master Fund, Ltd. (“Sabby”) 1,475,142 of the Company’s ordinary shares (the “Shares”), par value NIS 2.5 per share (the “Ordinary Shares”), 4,250,000 two-year warrants to purchase Ordinary Shares with an exercise price of $0.45 per share (the “Warrants”), and 5,524,858 pre-funded warrants to purchase Ordinary Shares with an exercise price of $0.00001 per share (the “Pre-Funded Warrants” and collectively with the Shares, the Warrants and the Ordinary Shares underlying the Warrants and the Pre-Funded Warrants, the “Securities”) pursuant to an agreement with Sabby to fully settle the actions between the parties, which were pending in the Supreme Court of New York, New York County. On April 19, 2024, the Company raised approximately $2.9 million in gross proceeds in a registered direct offering with a single accredited institutional investor through the sale of an aggregate of 2,873,885 5,242,270 8,116,155 |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Use of estimates | a. Use of estimates: The preparation of the financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. As applicable to these financial statements, the most significant estimates and assumptions include (i) Revenue Recognition; (ii) Allowance for Doubtful Accounts; (iii) Deferred Income Taxes and (iv) measurement of the fair value of intangible assets and goodwill. |
Financial statements in U.S. dollars | b. Financial statements in U.S. dollars: Most of the revenues of the Company are received in U.S. dollars. In addition, a substantial portion of the costs of the Company are incurred in U.S. dollars. Therefore, management believes that the dollar is the currency of the primary economic environment in which the Company operate. Thus, the functional and reporting currency of the Company is the U.S. dollar. Transactions and balances denominated in U.S. dollars are presented at their original amounts. Monetary accounts denominated in currencies other than the dollar are re-measured into dollars in accordance with ASC No. 830, "Foreign Currency Matters". All transaction gains and losses from the re-measurement of monetary balance sheet items are reflected in the statements of operations as financial income or financial expenses as appropriate. |
Principles of consolidation | c. Principles of consolidation: The consolidated financial statements include the accounts of the Company and its subsidiaries. Intercompany transactions and balances were eliminated upon consolidation. Profits from intercompany sales, not yet realized outside the group, were also eliminated. |
Cash and cash equivalents | d. Cash and cash equivalents: The Company considers unrestricted short-term highly liquid investments originally purchased with maturities of three months or less to be cash equivalents. The Company has not held any cash equivalents during 2023 and 2022. |
Restricted Cash | e. Restricted Cash: Restricted cash held in interest bearing saving accounts which are used as a security for the Company's Israeli facility leasehold bank guarantee, and as a security for ongoing terms of the contracts with existing customers and commercial tenders guarantees. |
Allowance for credit losses | f. Allowance for credit losses: The allowance for credit losses is determined with respect to specific amounts the Company has determined to be doubtful of collection. In determining the allowance for credit losses, the Company considers, among other things, its past experience with such customers and the information available regarding such customers. |
Inventories | g. Inventories: Inventories are stated at the lower of cost or net realizable value. Inventory write-offs are mainly provided to cover risks arising from slow-moving items or technological obsolescence. Cost is determined for all types of inventory using the moving average cost method. |
Property and equipment | h. Property and equipment: Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method, over the estimated useful lives, at the following annual rates: years Computers and peripheral equipment 3 Leased Products to Customers 5 Office furniture and equipment 5 - 17 Leasehold improvements Over the shorter of the term of the lease or the life of the asset |
Intangible assets | i. Intangible assets: Intangible assets that are not considered to have an indefinite useful life are amortized using units of production and the straight-line basis over their estimated useful lives, as noted below. Recoverability of these assets is measured by a comparison of the carrying amount of the asset to the undiscounted future cash flows expected to be generated by the assets. If the assets are considered to be impaired, the amount of any impairment is measured as the difference between the carrying value and the fair value of the impaired assets. Intangible assets and their useful lives are as follows: Useful Life (in Years) Customers relationships & Other Between 4.5-13 (mainly 13) IP & Technology Between 4-15 (mainly 15) Capitalized software development costs 5 As of December 31, 2023, 2022 and 2021 no impairment losses were identified. Acquisition-related intangible assets: The Company accounts for its business combinations in accordance with ASC 805 “Business Combinations” and with ASC 350-20 “Goodwill and Other Intangible Assets” (“ASC 350-20”). ASC 805-10 specifies the accounting for business combinations and the criteria for recognizing and reporting intangible assets apart from goodwill. Acquisition-related intangible assets result from the Company’s acquisitions of businesses accounted for under the purchase method and consist of the value of identifiable intangible assets including developed software products, brand and patents, as well as goodwill. Goodwill is the amount by which the acquisition cost exceeds the fair values of identifiable acquired net assets on the date of purchase. Acquisition-related definite lived intangible assets are reported at cost, net of accumulated amortization. |
Goodwill | j. Goodwill: The Company’s goodwill reflects the excess of the consideration paid or transferred including the fair value of contingent consideration over the fair values of the identifiable net assets acquired. The goodwill impairment test is performed by evaluating an initial qualitative assessment of the likelihood of impairment. If this step indicates that the qualitative assessment does not result in a more likely than not indication of impairment, no further impairment testing is required. If it does result in a more likely than not indication of impairment, the impairment test is performed. In step one of the impairment test, the Company compares the fair value of the reporting unit to the carrying value of the reporting unit. If the fair value of the reporting unit exceeds the carrying value of the net assets allocated to that unit, goodwill is not impaired, and no further testing is required. If the fair value is less than the carrying value of the reporting unit, then the second step of the impairment test is performed to measure the amount of the impairment. In the second step, the reporting unit’s fair value is allocated to all the assets and liabilities of the reporting unit, including any unrecognized intangible assets, in a hypothetical analysis that simulates the business combination principles to derive an implied goodwill value. If the implied fair value of the reporting unit’s goodwill is less than its carrying value, the difference is recorded as impairment. For the years ended December 31, 2023 and 2022 the Company performed an annual impairment analysis and no impairment losses have been identified. |
Impairment of long-lived assets and intangible assets with definite useful life | k. Impairment of long-lived assets and intangible assets with definite useful life: The Company’s long-lived assets and intangible assets with definite useful life are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such asset is considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. |
Long lived assets held for sale | l. Long lived assets held for sale: The company accounted for its long-lived assets held for sale under ASC 360-10 ("Impairment or disposal of Long-lived Assets"). Under management decision, the patents acquired under Alvarion Ltd. and Safend Ltd. acquisitions during 2016, were not intended for internal use by the Company. Management entered into engagements with several brokers for the purpose of marketing and sale of those patents. The Company classifies an asset group (an “asset”) as held for sale in the period during which (i) the Company has approved and committed to a plan to sell the asset, (ii) the asset is available for immediate sale in its present condition, (iii) an active program to locate a buyer and other actions required to sell the asset have been initiated, (iv) the sale of the asset is probable and transfer of the asset is expected to qualify for recognition as a completed sale within one year, (v) the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value, and (vi) it is unlikely that significant changes to the plan will be made or that the plan will be abandoned. The Company initially and subsequently measures a long-lived asset that is classified as held for sale at the lower of its carrying value or fair value less any costs to sell. Any loss resulting from this measurement is recognized in operating loss for the period in which the held for sale criteria are met. Upon designation as an asset held for sale, the Company stops recording depreciation or amortization expense on the asset. The Company assesses the fair value of assets held for sale less any costs to sell at each reporting period until the asset is no longer classified as held for sale. Realization costs of the patents are immaterial. For the years ended December 31, 2023 and 2022 the Company did not identify any triggers for impairment |
Accrued severance pay and severance pay fund | m. Accrued severance pay and severance pay fund: The liabilities of the Company for severance pay of its Israeli employees are calculated pursuant to Israel’s Severance Pay Law. Employees are entitled to one month’s salary for each year of employment, or portion thereof. The Company’s liability for all its employees is presented under “accrued severance pay”. The Company deposits on a monthly basis to defined contribution plans. A defined contribution plan is a program that benefits an employee after termination of employment, under which the Company regularly makes fixed payments to a fund administered by a separate and independent entity so that the Company has no legal or constructive obligation to pay additional contributions if such fund does not contain sufficient assets to pay all employees the benefits to which they may be entitled relating to employee service in the current and prior periods. The fund assets are not included in the Company’s consolidated balance sheets. |
Revenue recognition | n. Revenue recognition: The Company and its subsidiaries generate their revenues from the sale of products, licensing, maintenance, royalties and long-term contracts (including training and installation). The Company recognize revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers The Company measures revenue based upon the consideration specified in the client arrangement, and revenue is recognized when the performance obligations in the client arrangement are satisfied. A performance obligation is a promise in a contract to transfer a distinct service to the customer. The transaction price of a contract is allocated to each distinct performance obligation and recognized as revenue when or as, the customer receives the benefit of the performance obligation. Under ASC 606, revenue is recognized when a customer obtains control of promised services in an amount that reflects the consideration the Company expect to receive in exchange for those services. To achieve this core principle, the Company applies the following five steps: 1) Identify the contract with a customer A contract with a customer exists when (i) the Company enters into an enforceable contract with a customer that defines each party’s rights regarding the services to be transferred and identifies the payment terms related to these services, (ii) the contract has commercial substance and, (iii) the Company determines that collection of substantially all consideration for services that are transferred is probable based on the customer’s intent and ability to pay the promised consideration. The Company applies judgment in determining the customer’s ability and intention to pay, which is based on a variety of factors including the customer’s historical payment experience or, in the case of a new customer, published credit and financial information pertaining to the customer. 2) Identify the performance obligations in the contract Performance obligations promised in a contract are identified based on the services that will be transferred to the customer that are both capable of being distinct, whereby the customer can benefit from the service either on its own or together with other resources that are readily available from third parties or from the Company, and are distinct in the context of the contract, whereby the transfer of the services is separately identifiable from other promises in the contract. To the extent a contract includes multiple promised services, the Company must apply judgment to determine whether promised services are capable of being distinct in the context of the contract. If these criteria are not met the promised services are accounted for as a combined performance obligation. 3) Determine the transaction price The transaction price is determined based on the consideration to which the Company will be entitled in exchange for transferring services to the customer. The Company evaluates whether a significant financing component exists when the Company recognizes revenue in advance of customer payments that occur over time. For example, some of the Company contracts include payment terms greater than one year from when we transfer control of goods and services to the Company customers and the receipt of the final payment for those goods and services. If a significant financing component exists, the Company classifies a portion of the transaction price as interest income, instead of recognizing all of the transaction price as revenue. The Company does not adjust the transaction price for the effects of financing if, at contract inception, the period between the transfer of control to a customer and final payment is expected to be one year or less. 4) Allocate the transaction price to performance obligations in the contract If the contract contains a single performance obligation, the entire transaction price is allocated to the single performance obligation. However, if a series of distinct services that are substantially the same qualifies as a single performance obligation in a contract with variable consideration, the Company must determine if the variable consideration is attributable to the entire contract or to a specific part of the contract. Contracts that contain multiple performance obligations require an allocation of the transaction price based on management’s judgement. 5) Recognize revenue when or as the Company satisfies a performance obligation The Company satisfies performance obligations either over time or at a point in time. Revenue is recognized at the time the related performance obligation is satisfied by transferring a promised good or service to a customer. Nature of goods and services The following is a description of the Company’s goods and services from which the Company generates revenue, as well as the nature, timing of satisfaction of performance obligations, and significant payment terms for each, as applicable: Software Maintenance and Support Services Revenue Software maintenance and support services contracts are sold in conjunction with the Company’s software products for its e-Gov, IoT and Connectivity, and Cyber Security revenue streams. The contract terms for software maintenance and support span one five The Company recognizes revenue from fixed-price service and maintenance contracts using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts toward satisfying a performance obligation. The Company recognizes revenue from maintenance and support services provided pursuant to the time elapsed under such contracts, as that is when the performance obligation to the Company customers under such arrangements is fulfilled. Perpetual Software License Revenue The Company generates revenue from the sales of perpetual software licenses for its Cyber Security and e-Gov segments, including sales for its Magna_DL, Magna_VL, Magna_Passport, and Magna_ID software products. The intellectual property rights for usage of these products are transferred to the customer at the time of purchase and the software does not require implementation services, ongoing maintenance and support, or other adaptions in order to maintain utility. In arrangements where ongoing services are not essential to the functionality of the delivered software, the Company recognizes perpetual software license revenue when the license agreement has been approved and the software has been delivered. The Company can identify each party’s rights, payment terms, and commercial substance of the content. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the adjusted market assessment approach. Annual Software License Revenue The Company generates revenue from the sales of time-based software licenses for certain of its software products. The intellectual property rights for access to these products are transferred to the customer for contract terms of one year and the software requires ongoing maintenance, support, or other adaptions in order to maintain utility. The Company recognizes revenue over time using the input method for its annual software licenses when ongoing services are determined to be essential to the functionality of the delivered software. The license along with the any customization services are transferred to the Company customers pursuant to the time elapsed under such contracts, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. System Design Revenue System design revenue relate to services provided to governments and national agencies in the early stages of a new project including incumbent system data information extraction, customer interviewing and specification mapping, architecture and software design, secure credential design, project management and planning, data migration design, project operation planning, training, assimilation, and operational processes optimization for the Company’s e-Gov and IoT solutions. The Company recognizes revenue from its system design services using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from system design services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the expected cost plus a margin approach. Implementation and System Deployment Revenue Implementation and system deployment revenue relate to services provided to governments and national agencies typically after the design stage is concluded including infrastructure setup and deployment, software and chip design development, software customizations, purchase, and deployment of hardware and necessary system components, system integration and implementation, process engineering, customer training, system quality assurance testing, load balancing and local environment optimizations, and operational system launch for the Company’s e-Gov and IoT solutions. The Company recognizes revenue from its implementation and system deployment revenue using the input method of accounting. Under the input method, revenue is recognized on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from implementation and system deployment services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the residual approach. Procurement of Secure Document Consumables Revenue The Company procures secure document consumables for its e-Gov government customers which are needed to issue secure documents after a project deployment is complete and a system in actively running and operational. These consumables are manufactured generally at secure printing facilities utilizing proprietary and customized designs, which the Company has developed during the project design stage, to provide multiple layers of security preventing falsification of documents. These consumables include base card stock, security laminates, holograms, passive RFID chip inlays, passport booklets, secure chip cards, and various other secure credentialing necessities. The Company recognizes revenue on procurement of secure document consumables products when the customer has control of the product, which is determined to be at the point in time when the products are delivered. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their stated prices within the contract. Wireless & RFID Products Revenue The Company’s wireless products include solutions for carrier wi-fi, enterprise connectivity, smart city, smart hospitality, connected campuses and connected events which enhance productivity and performance. The Company’s RFID products include asset tags which provide real-time asset loss prevention, inventory management, and personnel/asset tracking and vehicle tags which provide long-range vehicle ID for parking and fleet management, access control, asset loss prevention at airports, gated communities, truck and bus terminals, employee parking lots, hospitals, industrial facilities, railroads, mines and military installations. The Company recognizes revenue on wireless and RFID products when the customer has control of the equipment, which is determined to be at the point in time when the products are shipped. Where applicable, the Company identifies multiple performance obligations and record as revenue as the performance obligations are fulfilled based on their stated prices within the contract. Electronic Monitoring Services Revenue Electronic monitoring services represent fees the Company collects through the sale or rental of its PureSecurity Suite of products, which include the PureMonitor, PureTrack, PureTag, PureCom, PureBeacon, and SCRAM devices. These devices identify, track, and monitor people or objects in real time through the Company’s GPS monitoring, home monitoring, and alcohol tracking solutions. The Company recognizes revenue on the sale of electronic monitoring products when the customer has control of the equipment, which is determined to be at the point in time when the products are shipped. For devices which are rented and for electronic monitoring services provided, the Company recognizes revenue pursuant to the time elapsed for such contracts, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. The Company customers typically pay for these services based on a net rate per day per individual or on a fixed monthly rate. Treatment Services Revenue Treatment services revenue is an extension of the Company’s electronic monitoring services. The Company provides individuals who have completed or are near the end of their sentence with the resources necessary to productively transition back into society. Through the Company daily reporting centers, we provide criminal justice programs and reentry services to help reduce recidivism which include case management, substance abuse education, vocational training, parental support, employment readiness and job placement. These activities are considered to be a bundle of services which are a part of a series of distinct services recognized over time. The Company recognizes revenue from its treatment services using the input method of accounting. Under the input method, revenue is recognized revenue on the basis of an entity’s efforts or inputs toward satisfying a performance obligation. The Company recognizes revenue from implementation and system deployment services provided pursuant to time-and-materials based contracts as the services are performed, as that is when the Company performance obligation to its customers under such arrangements is fulfilled. Where applicable, the Company identify multiple performance obligations and record as revenue as the performance obligations are fulfilled based on the using the expected cost plus a margin approach. Professional Services Revenue The Company offers professional services for the Company’s Cyber Security software products, which includes an on-site / remote visit by a specialist technician to assist with installation, deployment and configuration. The Company recognizes revenue from professional services upon completion of the service performed for the customer. As these services are completed during a single onsite visit, revenue is recognized at a point in time of such onsite visit. Disaggregation of revenue In the following table, revenue is disaggregated by major geographic region and timing of revenue recognition. The table also includes a reconciliation of the disaggregated revenue with the reportable segments: Year ended December 31, 2023 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,455 $ 1,455 European countries 328 17,256 89 17,673 South America 12 - - 12 United States 279 6,487 - 6,766 Israel 562 23 - 585 APAC 79 - - 79 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Timing of revenue recognition Products and services transferred over time $ 343 $ 8,262 $ 1455 $ 10,060 Products transferred at a point in time 917 15,504 89 16,510 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Year ended December 31, 2022 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 374 $ 374 European countries 273 9,023 263 9,559 South America - - - - United States 351 6,526 - 6,877 Israel 614 79 - 693 APAC 146 - - 146 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Timing of revenue recognition Products and services transferred over time $ 498 $ 11,697 $ 335 $ 12,530 Products transferred at a point in time 886 3,931 302 5,119 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Year ended December 31, 2021 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,586 $ 1,586 European countries 527 2,242 143 2,912 South America 1 36 - 37 United States 410 6,410 - 6,820 Israel 648 109 - 757 APAC 48 107 - 155 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 Timing of revenue recognition Products and services transferred over time $ 44 $ 7,176 $ 1,428 $ 8,648 Products transferred at a point in time 1,590 1,728 301 3,619 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 Transaction price allocated to the remaining performance obligations Remaining performance obligations represent the transaction price of system deployment, service and maintenance contracts for which work has not been performed as of the period end date. As of December 31, 2023, the aggregate amount of the transaction price allocated to remaining performance totals $19.56 million. The Company expects approximately 68% of remaining performance obligations to be recognized into revenue within the next 12 months, with the remaining 32% recognized thereafter. The Company applies the practical expedient in paragraph ASC 606-10-50-14 and does not disclose information about remaining performance obligations that have original expected durations of one-year or less. We apply the transition practical expedient in paragraph ASC 606-10-65-1(f)(3) and do not disclose the amount of the transaction price allocated to the remaining performance obligations and an explanation of when the Company expects to recognize that amount as revenue. Additionally, applying the practical expedient in paragraph ASC 340-40-25-4, the Company recognizes the incremental costs of obtaining contracts (i.e., commissions) as an expense when incurred if the amortization period of the assets that the Company otherwise would have recognized is one-year or less. |
Research and development costs and software development costs | o. Research and development costs and software development costs: Research and development costs are expensed as incurred. Software development costs eligible for capitalization are accounted for in accordance with 985-20 Software - Costs of Software to be Sold, Leased or Marketed. Capitalization of software development costs for products to be sold to third parties begins upon the establishment of technological feasibility and ceases when the product is available for general release. Amortization is calculated and provided over the estimated economic life of the software, using the greater of (i) straight-line method or if applicable (ii) the ratio that current gross revenues for a product bear to the total of current and anticipated future gross revenues for that product. Amortization commences when developed software is available for general release to clients. The estimated useful life of capitalized software development costs is 5 years. |
Income taxes | p. Income taxes: The Company and its subsidiaries account for income taxes in accordance with ASC Topic 740, “Income Taxes”. This Statement prescribes the use of the liability method whereby deferred tax asset and liability account balances are determined based on differences between the financial reporting and tax bases of assets and liabilities and are measured using the enacted tax rates and laws, that will be in effect when the differences are expected to reverse. The Company and its subsidiaries provide a valuation allowance, if necessary, to reduce deferred tax assets to their estimated realizable value. The Company accounts for uncertain tax positions in accordance with ASC Topic 740-10, which prescribes detailed guidance for the financial statement recognition, measurement and disclosure of uncertain tax positions recognized in an enterprise’s financial statements. According to ASC Topic 740-10, tax positions must meet a more-likely-than-not recognition and measurement threshold. The Company’s accounting policy is to classify interest and penalties relating to uncertain tax positions under income taxes, however the Company did not recognize such items in its fiscal 2023 and 2022 financial statements. |
Concentrations of credit risk | q. Concentrations of credit risk: Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, restricted cash deposits and trade receivables. The Company’s trade receivables are derived from sales to customers located primarily in Europe, Africa, the United States and South America. The Company performs ongoing credit evaluations of its customers’ financial condition. The allowance for doubtful accounts is determined with respect to specific debts that the Company has determined to be doubtful of collection. Cash and cash equivalents and restricted cash deposits are deposited with major banks in Israel and the United States. Management believes that such financial institutions are financially sound and, accordingly, minimal credit risk exists with respect to these financial instruments. The Company has no significant off-balance-sheet concentration of credit risk. |
Concentrations of suppliers | r. Concentrations of suppliers: The Company purchases certain services and products used by it to generate revenues in its projects and sales from several sole suppliers. Although there are only a limited number of manufacturers of those particular services and products, management believe that other suppliers could provide similar services and products on comparable terms without affecting operating results |
Basic and diluted earnings per share | s. Basic and diluted earnings per share: Basic earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year. Diluted earnings per share are computed based on the weighted average number of ordinary shares outstanding during each year, plus the dilutive potential of stock options and warrants outstanding during the year using the treasury stock method. The numbers of potential shares from the conversion of options and warrants that have been excluded from the calculation were 10.575 million and 1.713 million for the years ended December 31, 2023 and 2022, respectively |
Fair value of financial instruments | t. Fair value of financial instruments: The Company applies ASC 820, "Fair Value Measurements and Disclosures" ("ASC 820"), pursuant to which fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., the "exit price") in an orderly transaction between market participants at the measurement date. In determining fair value, the Company uses various valuation approaches. ASC 820 establishes a hierarchy for inputs used in measuring fair value that maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring that the most observable inputs be used when available. Observable inputs are inputs that market participants would use in pricing the asset or liability developed based on market data obtained from sources independent of the Company. Unobservable inputs are inputs that reflect the Company's assumptions about the assumptions market participants would use in pricing the asset or liability developed based on the best information available in the circumstances. The hierarchy is broken down into three levels based on the inputs as follows: Level 1 - Quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company can access at the measurement date. Level 2 - Valuations based on one or more quoted prices in markets that are not active or for which all significant inputs are observable, either directly or indirectly. Level 3 - Valuations based on inputs that are unobservable and significant to the overall fair value measurement. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The carrying amounts of cash and cash equivalents, restricted cash, short-term bank deposits, other accounts receivable, trade payable, and other accounts payable and accrued expenses approximate their fair values due to the short-term maturities of such instruments. |
Accounting for stock-based compensation | u. Accounting for stock-based compensation: The Company accounts for stock-based compensation arrangements using a fair value method which requires the recognition of compensation expenses for costs related to all stock-based payments including stock options. The fair value method requires the Company to estimate the fair value of stock-based payment awards on the date of grant using an option-pricing model. The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted that are expensed on a straight-line basis over the requisite service period, which is generally the vesting period. The Company accounts for forfeitures as they occur. Option valuation models, including the Black-Scholes option-pricing model, require the input of several assumptions. Changes in the assumptions used can materially affect the grant-date fair value of an award. These assumptions include the risk-free interest rate, expected dividend yield, expected volatility and the expected life of the award. |
Treasury Shares | v. Treasury Shares: Treasury shares are recorded at cost and presented as a reduction of shareholders' equity. |
Leases | w. Leases: The Company adopted ASU 2016-02, Leases (“Topic 842” or “ASC 842”) on January 1, 2022, using the modified retrospective approach, by applying the new standard to all leases existing at the date of initial application. The standard requires lessees to recognize almost all leases on the balance sheet as a right-of-use asset and a lease liability and requires leases to be classified as either an operating or a finance type lease. The standard excludes leases of intangible assets or inventory. Leases with a term of 12 months or less can be accounted for in a manner similar to the accounting for operating leases under ASC 840. The ASC 842 requires lessors to account for leases using an approach that is substantially equivalent to ASC 840 for sales-type leases, direct financing leases and operating leases. The Company leases real estate and storage areas, which are all classified as operating leases. In addition to rent payments, the leases may require the Company to pay for insurance, maintenance, and other operating expenses. The Company determines if an arrangement is a lease at inception. Lease classification is governed by five criteria in ASC 842-10-25-2. If any of these five criteria is met, the Company classifies the lease as a finance lease. Otherwise, the Company classifies the lease as an operating lease. Operating leases are included in operating lease right-of-use (“ROU”) assets and operating lease liabilities in the consolidated balance sheets. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Operating and finance lease ROU assets and liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. The Company uses its incremental borrowing rate based on the information available at the commencement date to determine the present value of the lease payments. Operating lease expenses are recognized on a straight-line basis over the lease term. Exchange rate differences related to lease liabilities are recognized as finance income or expense. Several of the Company’s leases include options to extend the lease. For purposes of calculating lease liabilities, lease terms include options to extend the lease when it is reasonably certain that the Company will exercise such options. The Company's ROU assets are reviewed for impairment in accordance with ASC 360, "Property, Plant and Equipment" ("ASC 360"), whenever events in circumstances indicate that the carrying amount of an asset may not be recoverable. The ASC 842 provides practical expedients for an entity’s ongoing accounting. The Company elected the short-term lease recognition exemption for all leases with a term shorter than 12 months. This means that for those leases, the Company does not recognize ROU assets or lease liabilities but recognizes lease expenses over the lease term on a straight-line basis. See Note 9 for further information on leases. Upon adoption as of January 1, 2021, the Company recorded right-of-use leased assets and corresponding liabilities of $1200. See Note 8 for further information on leases. |
Allocation of proceeds and related issuance costs | x. Allocation of proceeds and related issuance costs: When multiple instruments are issued in a single transaction (package issuance), the total net proceeds from the transaction are allocated among the individual freestanding instruments identified. The allocation occurs after identifying all the freestanding instruments and the subsequent measurement basis for those instruments. Financial instruments that are required to be subsequently measured at fair value (i.e. derivative warrants liability and derivative liability related to bifurcated embedded conversion feature) are measured at fair value and the remaining consideration is allocated to other financial instruments that are not required to be subsequently measured at fair value (i.e. certain convertible bridge loans, warrants eligible for equity classification) and common stock, based on the relative fair value basis for such instruments. The allocation of issuance costs to freestanding instruments was based on an approach that is consistent with the allocation of the proceeds, as described above. Issuance costs allocated to the derivative warrant liabilities were immediately expensed, as discussed above. Issuance costs allocated to warrants stock classified as equity component were recorded as a reduction of additional paid-in capital. |
Stock Warrants | y. Stock Warrants Certain warrants that were granted by the Company to investors are classified as a component of permanent equity since they are freestanding financial instruments that are legally detachable and separately exercisable, do not embody an obligation for the Company to repurchase its own shares, and permit the holders to receive a fixed number of shares of common stock upon exercise for a fixed exercise price and thus, are considered as indexed to the Company’s own stock. In addition, the warrants must require physical settlement and may not provide any guarantee of value or return. Such warrants were initially recognized based on the allocation method described in Note 2x above as an increase to additional paid-in capital. When applicable, direct issuance expenses that were allocated to the above warrants were deducted from additional paid-in capital. |
Derivative Warrants Liability | z. Derivative Warrants Liability: The Company accounts for certain warrants to purchase Ordinary Shares in connection with certain transactions, held by investors, that include a fundamental transaction feature pursuant to which such warrants could be required to be settled in cash upon certain events, as current liability according to the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”). The Company accounted for these warrants as a financial liability measured upon initial recognition and on subsequent periods at fair value by using the Black-Scholes Option Pricing Model. Certain warrants that were granted by the Company in connection with certain transactions (see also Notes 10&14) entitle the investors to exercise the warrants for a variable number of shares and/or for a variable exercise price, accordingly, the warrants were classified as a current liability according to the provisions of ASC 815-40, “Derivatives and Hedging - Contracts in Entity’s Own Equity” (“ASC 815-40”). The Company accounted for these warrants as a financial derivative liability measured upon initial recognition and on subsequent periods at fair value by using the Black-Scholes Option Pricing Model. The fair value of the aforesaid warrants derivative liability is estimated using the Black-Scholes Model which requires inputs such as the expected term of the warrants, share price volatility and risk-free interest rate. These assumptions are reviewed on a regular basis and changes in the estimated fair value of the outstanding warrants are recognized each reporting period as part of in the “Financing (income) expenses, net” line in operations in the accompanying consolidated statement of net loss, until such warrants are exercised or expired. When applicable, direct issuance expenses that were allocated to the above warrants were expensed as incurred. |
Reclassification | aa. Reclassification Certain comparative figures have been reclassified to conform to the current year presentation. Such reclassifications did not have any significant impact on the Company's equity, net loss or cash flows. |
Forgivable Loans Received Under the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) Paycheck Protection Program (the “PPP”) | bb. Forgivable Loans Received Under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) Paycheck Protection Program (the “PPP”) On February 26, 2021, the Company received a loan pursuant to the PPP, which was established under the “CARES Act”, as administered by the U.S. Small Business Administration (the “SBA”). The loan, in the principal amount of $723 (the “PPP Loan”) was disbursed pursuant to a promissory note issued by the Company (the “Promissory Note”). Pursuant to the CARES Act and the PPP, all or a portion of the principal amount of the PPP Loan is subject to forgiveness under certain conditions. The Company used the proceeds of the PPP Loan in a manner that qualified for forgiveness of the PPP Loan, accordingly the Company accounted for the PPP Loan as a government grant and presented the income as a reduction of the related payroll expenses in the year ended December 31, 2021 as follows: $60 in cost of revenues, $126 in selling and marketing expenses and $537 in general and administrative expenses. |
Recently Adopted Accounting Standards | cc. Recently Adopted Accounting Standards In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments – Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) which replaces the current incurred loss methodology with an expected loss methodology which is referred to as the current expected credit loss (“CECL”) methodology. The measurement of credit losses under the CECL methodology is applicable to financial assets measured at amortized cost, including loans receivables and trade accounts receivables and held-to-maturity debt securities. It also applies to off-balance sheet credit exposures not 842 In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40); Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which addresses issues identified as a result of the complexities associated with applying U.S. GAAP for certain financial instruments with characteristics of liabilities and equity. This update addresses, among other things, the number of accounting models for convertible debt instruments and convertible preferred stock, targeted improvements to the disclosures for convertible instruments and earnings-per-share (“EPS”) guidance and amendments to the guidance for the derivatives scope exception for contracts in an entity’s own equity, as well as the related EPS guidance. This update applies to all entities that issue convertible instruments and/or contracts in an entity’s own equity. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The adoption of ASU 2020-06 on January 1, 2022 did not have a material impact on the Company’s consolidated financial statements and disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging- Contracts in Entity’s Own Equity (Subtopic 815-40); Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options, a consensus of the FASB Emerging Issues Task Force (“ASU 2021-04”), which aims to clarify and reduce diversity in issuer's accounting for modifications or exchanges of freestanding equity-classified written call options that remain equity classified after modification or exchange. This update applies to all entities that issue freestanding written call options that are classified in equity. This guidance is effective for financial statements issued for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. FASB specified that an entity should adopt the guidance as of the beginning of its annual fiscal year. The adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on the Company’s consolidated financial statements and disclosures. |
Recently Issued Accounting Standards Not Yet Effective | dd. Recently Issued Accounting Standards Not Yet Effective On December 14, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2023-09, “ Improvements to Income Tax Disclosures”, This ASU will only have an impact on the Company's income tax disclosures. The Company is currently evaluating the impact of the adoption on its consolidated financial statements. In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280), “ Improvements to Reportable Segment Disclosures,” Other new pronouncements issued but not effective as of December 31, 2023 are not expected to have a material impact on the Company’s consolidated financial statements. |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Depreciation of Property and Equipment | years Computers and peripheral equipment 3 Leased Products to Customers 5 Office furniture and equipment 5 - 17 Leasehold improvements Over the shorter of the term of the lease or the life of the asset |
Schedule of Intangible Assets and their Useful Lives | Useful Life (in Years) Customers relationships & Other Between 4.5-13 (mainly 13) IP & Technology Between 4-15 (mainly 15) Capitalized software development costs 5 |
Schedule of disaggregation of revenue by major geographic region and timing of revenue recognition | Year ended December 31, 2023 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,455 $ 1,455 European countries 328 17,256 89 17,673 South America 12 - - 12 United States 279 6,487 - 6,766 Israel 562 23 - 585 APAC 79 - - 79 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Timing of revenue recognition Products and services transferred over time $ 343 $ 8,262 $ 1455 $ 10,060 Products transferred at a point in time 917 15,504 89 16,510 Total revenue $ 1,260 $ 23,766 $ 1544 $ 26,570 Year ended December 31, 2022 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 374 $ 374 European countries 273 9,023 263 9,559 South America - - - - United States 351 6,526 - 6,877 Israel 614 79 - 693 APAC 146 - - 146 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Timing of revenue recognition Products and services transferred over time $ 498 $ 11,697 $ 335 $ 12,530 Products transferred at a point in time 886 3,931 302 5,119 Total revenue $ 1,384 $ 15,628 $ 637 $ 17,649 Year ended December 31, 2021 Cyber Security IoT e-Gov Total Major geographic areas Africa $ - $ - $ 1,586 $ 1,586 European countries 527 2,242 143 2,912 South America 1 36 - 37 United States 410 6,410 - 6,820 Israel 648 109 - 757 APAC 48 107 - 155 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 Timing of revenue recognition Products and services transferred over time $ 44 $ 7,176 $ 1,428 $ 8,648 Products transferred at a point in time 1,590 1,728 301 3,619 Total revenue $ 1,634 $ 8,904 $ 1,729 $ 12,267 |
OTHER CURRENT ASSETS (Tables)
OTHER CURRENT ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Current Assets | December 31, 2023 2022 Prepaid expenses $ 133 $ 224 Advances to suppliers 337 337 Government institutions 479 740 Guaranty held by customer 662 621 Other 131 317 $ 1,742 $ 2,239 |
INVENTORIES, NET (Tables)
INVENTORIES, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, Net | December 31, 2023 2022 Raw materials, parts and supplies $ 1,380 $ 1,726 Finished products 1,123 1,685 $ 2,503 $ 3,411 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment, Net | December 31, 2023 2022 Cost: Computers and peripheral equipment $ 3,390 $ 3,206 Office furniture and equipment 852 852 Trade Equipment 42 42 Leasehold improvements 210 210 Equipment held by customer 4,420 2,890 8,914 7,200 Accumulated depreciation: Computers and peripheral equipment 2,990 2,855 Office furniture and equipment 785 760 Trade Equipment 42 39 Leasehold improvements 206 198 Equipment held by customer 2,190 1,708 6,213 5,560 Depreciated cost $ 2,701 $ 1,640 |
INTANGIBLE ASSETS, NET (Tables)
INTANGIBLE ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Other Intangible Assets | December 31, 2023 December 31, 2022 Carrying Amount Accumulated Amortization Net Book Value Carrying Amount Accumulated Amortization Net Book Value Customers relationships & Other $ 8,734 $ 8,427 $ 307 $ 8,734 $ 8,112 $ 622 IP & Technology 7,019 5,252 1,767 7,019 4,898 2,121 Capitalized software development costs 11,266 7,764 3,502 9,614 6,740 2,874 $ 27,019 $ 21,443 $ 5,576 $ 25,367 $ 19,750 $ 5,617 |
OTHER LONG-TERM ASSETS, NET (Ta
OTHER LONG-TERM ASSETS, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Long Term Assets [Abstract] | |
Schedule of Other Long-term Assets, Net | December 31, 2023 2022 Severance pay funds $ - $ 482 Deferred tax long term 501 501 Operating lease right-of-use asset 487 484 $ 988 $ 1,467 |
ACCRUED EXPENSES AND OTHER LI_2
ACCRUED EXPENSES AND OTHER LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accrued Liabilities and Other Liabilities [Abstract] | |
Schedule of Accrued Expenses and Other Liabilities | December 31, 2023 2022 Accrued management services $ 86 $ 86 Professional services 207 202 Other accrued expenses 192 181 $ 485 $ 469 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of operating leases expenses | Year ended December 31, 2023 2022 The components of lease expense were as follows: Operating leases expenses $ 701 $ 475 Cash flow information related to operating leases: Cash used in operating activities $ 694 $ 502 Non-cash activity - Right of use assets obtained in exchange for new operating lease liabilities $ 652 $ - |
Schedule of supplemental information related to operating leases | December 31, 2023 2022 Supplemental information related to operating leases, including location of amounts reported in the accompanying consolidated balance sheets, follows: Other assets - Right-of-Use assets $ 1,824 $ 1,200 Accumulated amortization 1,337 716 Operating lease Right-of-Use assets, net $ 487 $ 484 Lease liabilities – current - accrued expenses and other liabilities $ 401 $ 381 Lease liabilities – noncurrent 108 108 Total operating lease liabilities $ 509 $ 489 Weighted average remaining lease term in years 2.25 Weighted average annual discount rate 9 % |
Schedule of future minimum payments under operating leases | 2024 437 2025 110 Total operating lease payments 547 Less: imputed interest (38 ) Present value of lease Liabilities $ 509 |
WARRANTS LIABILITY (Tables)
WARRANTS LIABILITY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Warrants and Rights Note Disclosure [Abstract] | |
Schedule of warrants liability | Issued to investors December 31, 2023 2022 Outstanding at January 1 $ - $ - Issued to investors 3,786 - Exercised (1,473 ) - Changes in fair value (2,313 ) - Outstanding at December 31 $ - $ - |
OTHER LONG-TERM LIABILITIES (Ta
OTHER LONG-TERM LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of other long term liabilities | December 31, 2023 2022 Deferred revenues $ 305 $ 269 Deferred tax liability 170 170 Accrued severance pay - 523 Long- term operating lease liabilities 108 108 $ 583 $ 1,070 |
INCOME TAX (Tables)
INCOME TAX (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Deferred Tax Assets and Liabilities | December 31, 2023 2022 Operating loss carry forwards $ 24,106 $ 21,362 Reserves and allowances 4,939 4,475 Net deferred tax assets before valuation allowance 29,045 25,837 Valuation allowance (28,622 ) (25,414 ) Net deferred tax assets 423 423 Deferred income taxes consist of the following: Domestic 21,234 20,867 Valuation allowance (20,811 ) (20,444 ) Net deferred tax assets 423 423 Foreign 7,811 4,970 Valuation allowance (7,811 ) (4,970 ) $ - $ - |
Schedule of Income (Loss) before Income Tax | Year ended December 31, 2023 2022 2021 Domestic $ (1,880 ) $ (7,013 ) (10,616 ) Foreign (2,142 ) (743 ) 483 $ (4,022 ) $ (7,756 ) (10,133 ) |
Schedule of Effective Income Tax Reconciliation | Year ended December 31, 2023 2022 2021 Loss before income tax, as reported in the consolidated statements of operations $ (4,022 ) $ (7,756 ) (10,133 ) Statutory tax rate in Israel 23 % 23 % 23 % Theoretical tax benefit (925 ) (1,784 ) (2,331 ) Changes in valuation allowance 943 1185 1,438 Changes in foreign currency exchange rate and other differences 576 481 788 Non-deductible expenses and other differences (594 ) (181 ) (110 ) Actual income tax expense (benefit) $ - $ (299 ) 5 |
SHARE CAPITAL (Tables)
SHARE CAPITAL (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Class of Stock [Line Items] | |
Schedule of stock option awards of grant Black-Scholes option | March 30, November 15, 2023 2023 Risk-free interest rate 3.60 % 4.57 % Dividend yield 0 % 0 % Volatility factor 100 % 116 % Expected life of the options 5.00 4.38 |
Schedule of stock option activity | Year ended December 31 2023 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at Beginning of year 811,050 $ 3.58 21,388 $ 12.3 33,484 $ 23.1 Granted 22,000 $ 1.23 800,937 $ 3.25 - $ - Exercised (250 ) $ 1.00 (1,650 ) $ 1.00 (4,496 ) $ 4.1 Canceled and forfeited (10,625 ) $ 4.17 (9,625 ) $ 3.79 (7,600 ) $ 22.2 Outstanding at end of year 822,175 $ 3.51 811,050 $ 3.58 21,388 $ 12.3 Exercisable at end of year 416,975 $ 3.80 213,597 $ 4.15 15,950 $ 12.8 |
Schedule of Non-vested Option Activity | Year ended December 31 2023 2022 2021 Number of options Weighted average exercise price Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding at Beginning of year 597,453 $ 3.51 5,438 $ 10.7 14,175 $ 16.4 Granted 22,000 $ 1.23 800,937 $ 3.25 - $ - Vested (204,978 ) $ 3.46 (199,297 ) $ 3.94 (5,437 ) $ 10.7 Canceled and forfeited (9,275 ) $ 3.68 (9,625 ) $ 3.79 (3,300 ) $ 35.2 Non-vested as of December 31, 2023 405,200 $ 3.20 597,453 $ 3.51 5,438 $ 10.7 |
Schedule of allocation of the stock-based compensation | Year ended December 31, 2023 2022 2021 Cost of revenues $ 13 $ 17 $ 7 Research and development expenses 95 67 12 Selling and marketing expenses 7 7 7 General and administrative expenses 128 47 5 $ 243 $ 138 $ 31 |
Schedule of Options Outstanding and Exercisable | Options outstanding Options Exercisable Number outstanding Weighted average remaining contractual life (years) Exercise price Aggregate intrinsic value Number outstanding Weighted average remaining contractual life (years) Aggregate intrinsic value 8,188 5.26 $ 1.00 $ - 8,188 5.26 $ - 16,350 7.32 $ 1.23 $ - 2,700 6.55 $ - 763,000 5.68 $ 3.25 $ - 373,500 5.66 $ - 25,387 5.22 $ 7.50 $ - 23,337 5.16 $ - 9,250 5.07 $ 20.00 $ - 9,250 5.07 $ - 822,175 $ - 416,975 $ - |
Schedule of range of exercise prices and expiration date for warrants outstanding | Exercise Price Number of warrants Outstanding Exercisable until $ 18.70 2,500 2025 $ 7.50 7,500 2026 $ 17.07 237,000 2027 $ 0.50 9,505,820 2029 9,752,820 |
Warrants [Member] | |
Class of Stock [Line Items] | |
Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block] | Year ended December 31 2023 2022 2021 Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Number of warrants Weighted average exercise price Outstanding at Beginning of year 901,869 $ 10.06 247,000 $ 17.07 247,000 $ 17.07 Issued 9,505,820 $ 0.5 1,219,738 $ 4.96 - $ - Exercised 654,869 $ 3.20 564,869 $ 3.08 - $ - Expired - $ - - $ - - $ - Outstanding at end of year 9,752,830 $ 0.91 901,869 $ 10.06 247,000 $ 17.07 |
Option Plan [Member] | |
Class of Stock [Line Items] | |
Schedule of stock option awards of grant Black-Scholes option | Year ended December 31, 2023 2022 Weighted Average Risk-free interest rate 3.84 % 2.84 % Dividend yield 0 % 0 % Weighted Average Volatility factor 91 % 74 % Weighted Average Expected life of the options 4.53 6.64 |
Black Scholes Valuation Model [Member] | |
Class of Stock [Line Items] | |
Schedule of stock option awards of grant Black-Scholes option | August 3, November 15, 2023 2023 Risk-free interest rate 4.30 % 4.54 % Dividend yield 0 % 0 % Volatility factor 98 % 113 % Expected life of the options 5.00 4.72 |
SEGMENTS, MAJOR CUSTOMERS AND_2
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information, by segment | Year ended December 31, 2023 Cyber Security IoT e-Gov Total Revenues $ 1,260 $ 23,766 $ 1,544 $ 26,570 Operating Income (Loss) 524 (99 ) (3,676 ) (3,359 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 8 $ 2,519 $ 174 $ 2,701 Year ended December 31, 2022 Cyber Security IoT e-Gov Total Revenues $ 1,384 $ 15,628 $ 637 $ 17,649 Operating loss 680 (3,993 ) (2,692 ) (6,005 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 30 $ 1,590 $ 50 $ 1,640 Year ended December 31, 2021 Cyber Security IoT e-Gov Total Revenues $ 1,634 $ 8,904 $ 1,729 $ 12,267 Operating loss 400 (3,004 ) (4,133 ) (6,737 ) Goodwill 1,075 2,229 3,722 7,026 Total Property and Equipment, net $ 47 $ 1,543 $ 214 $ 1,804 |
Schedule of reconciliation of operating profit (loss) from segments to consolidated | Year ended December 31, 2023 2022 2021 Operating loss Total operating loss of reportable segments $ (3,359 ) $ (6,005 ) (6,737 ) Financial expenses, net (663 ) (1,751 ) (3,396 ) Loss before income taxes $ (4,022 ) $ (7,756 ) (10,133 ) |
Schedule of external customer revenues by geographic area | Year ended December 31, 2023 2022 2021 Total Revenues Property and Equipment, net Total revenues Property and Equipment, net Revenues Property and Equipment, net Africa $ 1,455 $ - $ 374 $ - $ 1,586 - European countries 17,673 - 9,559 - 2,912 - South America 12 - - - 37 - United States 6,766 21 6,877 38 6,820 47 Israel 585 2,680 693 1,602 757 1,757 APAC 79 - 146 - 155 - $ 26,570 $ 2,701 $ 17,649 $ 1,640 $ 12,267 1,804 |
Schedule of revenues by external customers by products and services | Year ended December 31, 2023 2022 2021 Raw materials and equipment $ 2,841 $ 302 1,119 Electronic monitoring 17,819 11,614 6,393 Treatment programs 4,538 3,998 3,292 Maintenance, royalties and project management 1,372 1,735 1,463 $ 26,570 $ 17,649 12,267 |
Schedule of major customers, percent of total sales | Year ended December 31, 2023 2022 2021 Customer A 50 % 36 % - Customer B 9 % - 10 % 59 % 36 % 10 % |
OTHER EXPENSE, NET (Tables)
OTHER EXPENSE, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule of Other (Income) Expenses | Year ended December 31, 2023 2022 2021 Credit losses $ 1,457 $ 1,000 $ 3,000 Other 1,355 138 1,374 Total other expense, net $ 2,812 $ 1,138 $ 4,374 |
Schedule of Allowance for Doubtful Accounts | Year ended December 31, 2023 2022 2021 Balance at beginning of period $ 12,667 $ 11,667 $ 8,667 Provision during the period 1,457 1,000 3,000 Balance at end of period $ 14,124 $ 12,667 $ 11,667 |
FINANCIAL EXPENSES, NET (Tables
FINANCIAL EXPENSES, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Nonoperating Income (Expense) [Abstract] | |
Schedule of Financial (Expenses), Net | Year ended December 31, 2023 2022 2021 Interest, bank charges and fees $ (2,512 ) $ (1,770 ) $ (3,642 ) Change in Fair value of derivative warrants liabilities 2,313 - - Exchange differences, net (464 ) 19 246 Total financial expenses, net $ (663 ) $ (1,751 ) $ (3,396 ) |
GENERAL (Details)
GENERAL (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | ||||||||||
Aug. 03, 2023 | Apr. 19, 2024 | Nov. 15, 2023 | Mar. 30, 2023 | Feb. 28, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Apr. 08, 2024 | Jan. 19, 2024 | Dec. 31, 2020 | Dec. 31, 2018 | |
Accumulated deficit | $ 106,948 | $ 102,926 | ||||||||||
Net cash used in operating activities | 2,367 | 4,654 | $ 9,697 | |||||||||
Cash, cash equivalents and restricted cash | 5,577 | $ 4,505 | 4,604 | $ 3,952 | ||||||||
Net working capital | 23,059 | |||||||||||
Amount of secured financing | $ 20,000 | |||||||||||
Remaining available secured financing | $ 6,000 | |||||||||||
Amount raised from private equity placement | $ 5,848 | |||||||||||
Gross proceeds of subordinated debt | 12,000 | $ 12,000 | ||||||||||
Amount of direct offering cost | $ 2,750 | $ 2,000 | $ 2,400 | |||||||||
Warrant issued purchase of ordinary shares | 661,000 | 1,081,000 | 485,000 | |||||||||
Pre-funded warrant issued purchase of ordinary shares | 2,574,295 | 3,671,910 | 1,032,615 | |||||||||
Warrants exercise price | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||||
Concurrent private placement of warrant to purchase ordinary shares | 3,235,295 | 9,505,820 | 1,517,615 | |||||||||
Concurrent private placement of exercise price | $ 0.85 | $ 0.5 | $ 1.66 | |||||||||
Promissory notes [Member] | ||||||||||||
Gross proceeds of subordinated debt | $ 1,600 | |||||||||||
Subsequent Event [Member] | ||||||||||||
Amount of direct offering cost | $ 2,900 | |||||||||||
Warrant issued purchase of ordinary shares | 2,873,885 | 940,000 | 4,250,000 | |||||||||
Pre-funded warrant issued purchase of ordinary shares | 5,242,270 | |||||||||||
Warrants exercise price | $ 0.00001 | $ 0.45 | ||||||||||
Concurrent private placement of warrant to purchase ordinary shares | 8,116,155 | |||||||||||
Concurrent private placement of exercise price | $ 0.38 | |||||||||||
Secured Credit Facility [Member] | Fortress Investment Group [Member] | ||||||||||||
Remaining available secured financing | $ 6,000 |
GENERAL - Senior Secured Credit
GENERAL - Senior Secured Credit Facility and subordinated Debt (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Feb. 28, 2021 USD ($) | Dec. 31, 2023 USD ($) $ / shares shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2019 USD ($) | Jun. 30, 2021 USD ($) | Oct. 26, 2018 USD ($) | |
Line of Credit Facility [Line Items] | |||||||
Stock issued during period, value | $ 1,280 | $ 5,846 | |||||
Gross proceeds of subordinated debt | $ 12,000 | $ 12,000 | |||||
Subordinated promissory note term | 2 years | ||||||
Consideration unsecured subordinated promissory note | 500 | $ 211 | $ 7,601 | ||||
Subordinated Debt | $ 16,290 | ||||||
Certain Institutional Investor [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Aggregate principal amount | $ 7,000 | $ 5,000 | |||||
Consideration unsecured subordinated promissory note | $ 12,000 | ||||||
Fortress [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Initial warrants received by investor | shares | 25,000 | ||||||
Additional warrants | shares | 75,000 | ||||||
Stock issued during period, shares | shares | 106,705 | ||||||
Stock issued during period, value | $ 200 | ||||||
Sale of stock, price per share | $ / shares | $ 1.87 | ||||||
Warrants and rights outstanding, term | 7 years | ||||||
Outstanding principal of credit Facility | $ 6,000 | ||||||
Credit Facility [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Unused Fee (as a percent) | 0.50% | ||||||
Original issue discount (as a percent) | 2.50% | ||||||
Credit Facility [Member] | Minimum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Term fee (as a percent) | 2.25% | ||||||
Credit Facility [Member] | Maximum [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Term fee (as a percent) | 4.50% | ||||||
Credit Facility [Member] | EBITDA Leverage Ratio Greater Than or Equal to 2.50 Times [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
EBITDA Leverage Ratio | 2.5 | ||||||
Credit Facility [Member] | EBITDA Leverage Ratio Less Tan 2.50x [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Interest Margin | 7% | ||||||
EBITDA Leverage Ratio | 2.5 | ||||||
Credit Facility [Member] | Fortress [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Aggregate principal amount | $ 20,000 | ||||||
Current borrowing capacity | 1,000 | ||||||
Gross draw down amount | $ 4,000 | ||||||
Outstanding principal of credit Facility | $ 17,662 | ||||||
Incremental Term Loan [Member] | Fortress [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Current borrowing capacity | 10,000 | ||||||
Initial Term Loan [Member] | Fortress [Member] | |||||||
Line of Credit Facility [Line Items] | |||||||
Current borrowing capacity | $ 10,000 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Additional Information (Details) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Feb. 26, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Antidilutive shares | 10,575 | 1,713 | ||
Right-of-use leased assets and corresponding liabilities | $ 1,200 | |||
Paycheck Protection Program (the “PPP”) Loan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Principal loan amount | $ 723 | |||
Cost of revenues [Member] | Paycheck Protection Program (the “PPP”) Loan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
PPP Loan government grant as reduction of payroll expenses | $ 60 | |||
Selling and marketing expenses [Member] | Paycheck Protection Program (the “PPP”) Loan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
PPP Loan government grant as reduction of payroll expenses | 126 | |||
General and administrative expenses [Member] | Paycheck Protection Program (the “PPP”) Loan [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
PPP Loan government grant as reduction of payroll expenses | $ 537 | |||
Customers relationships & Other [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 13 years | |||
IP & Technology [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 15 years | |||
Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Contract term (in years) | 1 year | |||
Minimum [Member] | Customers relationships & Other [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 4 years 6 months | |||
Minimum [Member] | IP & Technology [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 4 years | |||
Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Contract term (in years) | 5 years | |||
Maximum [Member] | Customers relationships & Other [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 13 years | |||
Maximum [Member] | IP & Technology [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 15 years | |||
Computers and peripheral equipment [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Tangible asset, useful life | 3 years | |||
Leased Products To Customers [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Tangible asset, useful life | 5 years | |||
Office furniture and equipment [Member] | Minimum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Tangible asset, useful life | 5 years | |||
Office furniture and equipment [Member] | Maximum [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Tangible asset, useful life | 17 years | |||
Capitalized software development costs [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Intangible asset, useful life | 5 years |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 26,570 | $ 17,649 | $ 12,267 |
Products and services transferred over time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 10,060 | 12,530 | 8,648 |
Products transferred at a point in time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 16,510 | 5,119 | 3,619 |
Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,260 | 1,384 | 1,634 |
Cyber Security [Member] | Products and services transferred over time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 343 | 498 | 44 |
Cyber Security [Member] | Products transferred at a point in time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 917 | 886 | 1,590 |
IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 23,766 | 15,628 | 8,904 |
IoT [Member] | Products and services transferred over time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 8,262 | 11,697 | 7,176 |
IoT [Member] | Products transferred at a point in time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 15,504 | 3,931 | 1,728 |
e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,544 | 637 | 1,729 |
e-Gov [Member] | Products and services transferred over time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,455 | 335 | 1,428 |
e-Gov [Member] | Products transferred at a point in time [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 89 | 302 | 301 |
Africa [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,455 | 374 | 1,586 |
Africa [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Africa [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Africa [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,455 | 374 | 1,586 |
European countries [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 17,673 | 9,559 | 2,912 |
European countries [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 328 | 273 | 527 |
European countries [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 17,256 | 9,023 | 2,242 |
European countries [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 89 | 263 | 143 |
South America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12 | 0 | 37 |
South America [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12 | 0 | 1 |
South America [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 36 |
South America [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
United States [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 6,766 | 6,877 | 6,820 |
United States [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 279 | 351 | 410 |
United States [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 6,487 | 6,526 | 6,410 |
United States [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Israel [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 585 | 693 | 757 |
Israel [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 562 | 614 | 648 |
Israel [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 23 | 79 | 109 |
Israel [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
APAC [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 79 | 146 | 155 |
APAC [Member] | Cyber Security [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 79 | 146 | 48 |
APAC [Member] | IoT [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 107 |
APAC [Member] | e-Gov [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 0 | $ 0 | $ 0 |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Remaining Performance Obligations (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
2022-01-01 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected amount of remaining performance obligations | $ 19,560 |
Expected percent of remaining performance obligations | 68% |
2023-01-01 [Member] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected percent of remaining performance obligations | 32% |
OTHER CURRENT ASSETS (Details)
OTHER CURRENT ASSETS (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 133 | $ 224 |
Advances to suppliers | 337 | 337 |
Government institutions | 479 | 740 |
Guaranty held by customer | 662 | 621 |
Other | 131 | 317 |
Other current assets | $ 1,742 | $ 2,239 |
INVENTORIES, NET (Details)
INVENTORIES, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials, parts and supplies | $ 1,380 | $ 1,726 |
Finished products | 1,123 | 1,685 |
Inventories, net | 2,503 | 3,411 |
Inventory net of write offs | $ 2,395 | $ 2,215 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | |||
Cost | $ 8,914 | $ 7,200 | |
Accumulated depreciation | 6,213 | 5,560 | |
Depreciated cost | 2,701 | 1,640 | $ 1,804 |
Computers and peripheral equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,390 | 3,206 | |
Accumulated depreciation | 2,990 | 2,855 | |
Office furniture and equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 852 | 852 | |
Accumulated depreciation | 785 | 760 | |
Trade Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 42 | 42 | |
Accumulated depreciation | 42 | 39 | |
Leasehold improvements [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 210 | 210 | |
Accumulated depreciation | 206 | 198 | |
Equipment held by customer [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 4,420 | 2,890 | |
Accumulated depreciation | $ 2,190 | $ 1,708 |
PROPERTY AND EQUIPMENT, NET - A
PROPERTY AND EQUIPMENT, NET - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | ||
Purchase of equipment | $ 1,714 | $ 524 |
Depreciation expenses | $ 653 | $ 688 |
INTANGIBLE ASSETS, NET - Other
INTANGIBLE ASSETS, NET - Other Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Carrying Amount | $ 27,019 | $ 25,367 |
Accumulated Amortization | 21,443 | 19,750 |
Net Book Value | 5,576 | 5,617 |
Customers relationships & Other [Member] | ||
Carrying Amount | 8,734 | 8,734 |
Accumulated Amortization | 8,427 | 8,112 |
Net Book Value | 307 | 622 |
IP & Technology [Member] | ||
Carrying Amount | 7,019 | 7,019 |
Accumulated Amortization | 5,252 | 4,898 |
Net Book Value | 1,767 | 2,121 |
Capitalized software development costs [Member] | ||
Carrying Amount | 11,266 | 9,614 |
Accumulated Amortization | 7,764 | 6,740 |
Net Book Value | $ 3,502 | $ 2,874 |
INTANGIBLE ASSETS, NET - Additi
INTANGIBLE ASSETS, NET - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization of Intangible Assets | $ 1,693 | $ 1,607 | $ 1,396 |
OTHER LONG-TERM ASSETS, NET (De
OTHER LONG-TERM ASSETS, NET (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Other Long Term Assets [Abstract] | ||
Severance pay funds | $ 0 | $ 482 |
Deferred tax long term | 501 | 501 |
Operating lease right-of-use asset | 487 | 484 |
Other long-term assets | $ 988 | $ 1,467 |
ACCRUED EXPENSES AND OTHER LI_3
ACCRUED EXPENSES AND OTHER LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accrued Liabilities and Other Liabilities [Abstract] | ||
Accrued management services | $ 86 | $ 86 |
Professional services | 207 | 202 |
Other accrued expenses | 192 | 181 |
Accrued expenses and other liabilities | $ 485 | $ 469 |
LEASES - Lease Expense (Details
LEASES - Lease Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
The components of lease expense were as follows: | ||
Operating leases expenses | $ 701 | $ 475 |
Cash flow information related to operating leases: | ||
Cash used in operating activities | 694 | 502 |
Non-cash activity - Right of use assets obtained in exchange for new operating lease liabilities | $ 652 | $ 0 |
LEASES - Supplemental Informati
LEASES - Supplemental Information Related to Operating Leases (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Leases [Abstract] | ||
Other assets - Right-of-Use assets | $ 1,824 | $ 1,200 |
Accumulated amortization | 1,337 | 716 |
Operating lease Right-of-Use assets, net | 487 | 484 |
Operating Lease, Liabilities | ||
Lease liabilities – current - accrued expenses and other liabilities | 401 | 381 |
Lease liabilities – noncurrent | 108 | 108 |
Operating Lease, Liability, Total | $ 509 | $ 489 |
Weighted average remaining lease term in years | 2 years 3 months | |
Weighted average annual discount rate | 9% |
LEASES - Future Minimum Lease C
LEASES - Future Minimum Lease Commitments (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Future minimum lease commitments under non-cancelable operating leases | ||
2023 | $ 437 | |
2025 | 110 | |
Total operating lease payments | 547 | |
Less: imputed interest | (38) | |
Present value of lease Liabilities | $ 509 | $ 489 |
LEASES - Additional Information
LEASES - Additional Information (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) m² | |
Herzliya [Member] | |
Other Commitments [Line Items] | |
Area of office and warehousing premise | m² | 1,139 |
Monthly fee | $ | $ 35 |
U.S. subsidiaries [Member] | |
Other Commitments [Line Items] | |
Area of office and warehousing premise | m² | 1,701 |
Monthly fee | $ | $ 27 |
WARRANTS LIABILITY (Details)
WARRANTS LIABILITY (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Class of Warrant or Right [Line Items] | |||
Changes in fair value | $ (2,313) | $ 0 | $ 0 |
Investor [Member] | |||
Class of Warrant or Right [Line Items] | |||
Outstanding at January 1 | 0 | 0 | |
Issued to investors | 3,786 | 0 | |
Exercised | (1,473) | 0 | |
Changes in fair value | (2,313) | 0 | |
Outstanding at December 31 | $ 0 | $ 0 | $ 0 |
OTHER LONG-TERM LIABILITIES (De
OTHER LONG-TERM LIABILITIES (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Disclosure [Abstract] | ||
Deferred revenues | $ 305 | $ 269 |
Deferred tax liability | 170 | 170 |
Accrued severance pay | 0 | 523 |
Long- term operating lease liabilities | 108 | 108 |
Other long-term liabilities | $ 583 | $ 1,070 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES - Additional Information (Details) $ / shares in Units, $ in Thousands | Apr. 19, 2024 $ / shares shares | Apr. 08, 2024 shares | Jan. 19, 2024 ₪ / shares shares | Jan. 19, 2024 $ / shares shares | Dec. 31, 2023 ₪ / shares | Dec. 31, 2023 USD ($) | Nov. 15, 2023 $ / shares shares | Aug. 03, 2023 $ / shares shares | Mar. 30, 2023 $ / shares shares | Dec. 31, 2022 ₪ / shares |
Other Commitments [Line Items] | ||||||||||
Bank guarantees | $ | $ 350 | |||||||||
Common Stock, Par or Stated Value Per Share | ₪ / shares | ₪ 2.5 | ₪ 2.5 | ||||||||
Warrant issued purchase of ordinary shares | 1,081,000 | 661,000 | 485,000 | |||||||
Warrants exercise price | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | |||||||
Subsequent Event [Member] | ||||||||||
Other Commitments [Line Items] | ||||||||||
Shares issued | 1,475,142 | 1,475,142 | ||||||||
Common Stock, Par or Stated Value Per Share | ₪ / shares | ₪ 2.5 | |||||||||
Warrant issued purchase of ordinary shares | 2,873,885 | 940,000 | 4,250,000 | 4,250,000 | ||||||
Warrants exercise price | $ / shares | $ 0.00001 | $ 0.45 | ||||||||
Pre-funded warrant issued purchase of ordinary shares | 5,242,270 | 5,524,858 | 5,524,858 | |||||||
Pre-funded warrants exercise price | $ / shares | $ 0.00001 |
INCOME TAX - Deferred Tax Asset
INCOME TAX - Deferred Tax Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Income Tax [Line Items] | ||
Operating loss carry forwards | $ 24,106 | $ 21,362 |
Reserves and allowances | 4,939 | 4,475 |
Net deferred tax assets before valuation allowance | 29,045 | 25,837 |
Valuation allowance | (28,622) | (25,414) |
Net deferred tax assets | 423 | 423 |
Domestic [Member] | ||
Income Tax [Line Items] | ||
Net deferred tax assets before valuation allowance | 21,234 | 20,867 |
Valuation allowance | (20,811) | (20,444) |
Net deferred tax assets | 423 | 423 |
Foreign [Member] | ||
Income Tax [Line Items] | ||
Net deferred tax assets before valuation allowance | 7,811 | 4,970 |
Valuation allowance | (7,811) | (4,970) |
Deferred Tax Liabilities, Net | $ 0 | $ 0 |
INCOME TAX - Income Tax Reconci
INCOME TAX - Income Tax Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (1,880) | $ (7,013) | $ (10,616) |
Foreign | (2,142) | (743) | 483 |
Loss before income taxes | $ (4,022) | $ (7,756) | $ (10,133) |
Statutory tax rate in Israel | 23% | 23% | 23% |
Theoretical tax benefit | $ (925) | $ (1,784) | $ (2,331) |
Changes in valuation allowance | 943 | 1,185 | 1,438 |
Changes in foreign currency exchange rate and other differences | 576 | 481 | 788 |
Non-deductible expenses and other differences | (594) | (181) | (110) |
Actual income tax expense (benefit) | $ 0 | $ (299) | $ 5 |
INCOME TAX - Additional Informa
INCOME TAX - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax [Line Items] | |||
Corporate tax rate (as a percent) | 23% | 23% | 23% |
Deferred Tax Assets, Valuation Allowance | $ 28,622 | $ 25,414 | |
Israel [Member] | |||
Income Tax [Line Items] | |||
Corporate tax rate (as a percent) | 23% | 23% | |
US [Member] | |||
Income Tax [Line Items] | |||
Corporate tax rate (as a percent) | 21% | 21% | |
CA [Member] | |||
Income Tax [Line Items] | |||
State tax rate | 8.84% | ||
NY [Member] | |||
Income Tax [Line Items] | |||
State tax rate | 6.50% | ||
NYC [Member] | |||
Income Tax [Line Items] | |||
State tax rate | 6.50% | ||
Domestic [Member] | |||
Income Tax [Line Items] | |||
Deferred Tax Assets, Valuation Allowance | $ 20,811 | $ 20,444 | |
Domestic [Member] | Capital Loss Carryforward [Member] | |||
Income Tax [Line Items] | |||
Other carryforward | 14,651 | ||
Foreign [Member] | |||
Income Tax [Line Items] | |||
Operating loss carryforward | 25,734 | ||
Deferred Tax Assets, Valuation Allowance | 7,811 | $ 4,970 | |
Parent Company [Member] | Foreign [Member] | |||
Income Tax [Line Items] | |||
Other carryforward | 423 | ||
Operating loss carryforward | 74,569 | ||
Deferred Tax Assets, Valuation Allowance | $ 24,106 |
SHARE CAPITAL - Black-Scholes O
SHARE CAPITAL - Black-Scholes Option Valuation Model (Details) | 1 Months Ended | 12 Months Ended | |||
Aug. 03, 2023 | Nov. 15, 2023 | Mar. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Credit Derivatives [Line Items] | |||||
Weighted Average Risk-free interest rate | 4.57% | 3.60% | 3.84% | 2.84% | |
Dividend yield | 0% | 0% | 0% | 0% | |
Weighted Average Volatility factor | 116% | 100% | 91% | 74% | |
Weighted Average Expected life of the options | 4 years 4 months 17 days | 5 years | 4 years 6 months 10 days | 6 years 7 months 20 days | |
Black Scholes Valuation Model [Member] | |||||
Credit Derivatives [Line Items] | |||||
Weighted Average Risk-free interest rate | 4.30% | 4.54% | |||
Dividend yield | 0% | 0% | |||
Weighted Average Volatility factor | 98% | 113% | |||
Weighted Average Expected life of the options | 5 years | 4 years 8 months 19 days |
SHARE CAPITAL - Stock Option Ac
SHARE CAPITAL - Stock Option Activity (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Shares Under Options | |||
Outstanding at beginning of year | 811,050 | 21,388 | 33,484 |
Granted | 22,000 | 800,937 | 0 |
Exercised | (250) | (1,650) | (4,496) |
Canceled and forfeited | (10,625) | (9,625) | (7,600) |
Outstanding at end of year | 822,175 | 811,050 | 21,388 |
Exercisable at end of year | 416,975 | 213,597 | 15,950 |
Weighted Average Exercise Price | |||
Outstanding at beginning of year | $ 3.58 | $ 12.3 | $ 23.1 |
Granted | 1.23 | 3.25 | 0 |
Exercised | 1 | 1 | 4.1 |
Canceled and forfeited | 4.17 | 3.79 | 22.2 |
Outstanding at end of year | 3.51 | 3.58 | 12.3 |
Exercisable at end of year | $ 3.8 | $ 4.15 | $ 12.8 |
SHARE CAPITAL - Non-vested Opti
SHARE CAPITAL - Non-vested Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Options | |||
Non-vested at beginning of year | 597,453 | 5,438 | 14,175 |
Granted | 22,000 | 800,937 | 0 |
Vested | (204,978) | (199,297) | (5,437) |
Forfeited and canceled | (9,275) | (9,625) | (3,300) |
Non-vested at end of year | 405,200 | 597,453 | 5,438 |
Weighted-average grant-date fair value | |||
Non-vested at beginning of year | $ 3.51 | $ 10.7 | $ 16.4 |
Granted | 1.23 | 3.25 | 0 |
Vested | 3.46 | 3.94 | 10.7 |
Forfeited and canceled | 3.68 | 3.79 | 35.2 |
Non-vested at end of period | $ 3.2 | $ 3.51 | $ 10.7 |
SHARE CAPITAL - Allocation of t
SHARE CAPITAL - Allocation of the stock-based compensation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation charge | $ 243 | $ 138 | $ 31 |
Cost of revenues [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation charge | 13 | 17 | 7 |
Research and development expenses [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation charge | 95 | 67 | 12 |
Selling and marketing expenses [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation charge | 7 | 7 | 7 |
General and administrative expenses [Member] | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Stock-based compensation charge | $ 128 | $ 47 | $ 5 |
SHARE CAPITAL - Options Outstan
SHARE CAPITAL - Options Outstanding and Exercisable (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 822,175 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 416,975 |
Aggregate intrinsic value | $ | $ 0 |
Exercise price 1 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 8,188 |
Weighted average remaining contractual life | 5 years 3 months 3 days |
Weighted average exercise price | $ / shares | $ 1 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 8,188 |
Weighted average remaining contractual life | 5 years 3 months 3 days |
Aggregate intrinsic value | $ | $ 0 |
Exercise price 2 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 16,350 |
Weighted average remaining contractual life | 7 years 3 months 25 days |
Weighted average exercise price | $ / shares | $ 1.23 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 2,700 |
Weighted average remaining contractual life | 6 years 6 months 18 days |
Aggregate intrinsic value | $ | $ 0 |
Exercise price 3 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 763,000 |
Weighted average remaining contractual life | 5 years 8 months 4 days |
Weighted average exercise price | $ / shares | $ 3.25 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 373,500 |
Weighted average remaining contractual life | 5 years 7 months 28 days |
Aggregate intrinsic value | $ | $ 0 |
Exercise price 4 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 25,387 |
Weighted average remaining contractual life | 5 years 2 months 19 days |
Weighted average exercise price | $ / shares | $ 7.5 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 23,337 |
Weighted average remaining contractual life | 5 years 1 month 28 days |
Aggregate intrinsic value | $ | $ 0 |
Exercise price 5 [Member] | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | |
Options outstanding | shares | 9,250 |
Weighted average remaining contractual life | 5 years 25 days |
Weighted average exercise price | $ / shares | $ 20 |
Aggregate intrinsic value | $ | $ 0 |
Options exercisable | shares | 9,250 |
Weighted average remaining contractual life | 5 years 25 days |
Aggregate intrinsic value | $ | $ 0 |
SHARE CAPITAL - Additional info
SHARE CAPITAL - Additional information concerning warrants activity (Details) - Note Warrant [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Number of warrants | |||
Outstanding at Beginning of year | 901,869 | 247,000 | 247,000 |
Issued | 9,505,820 | 1,219,738 | 0 |
Exercised | 654,869 | 564,869 | 0 |
Expired | 0 | 0 | 0 |
Outstanding at end of year | 9,752,830 | 901,869 | 247,000 |
Weighted average exercise price | |||
Outstanding at Beginning of year | $ 10.06 | $ 17.07 | $ 17.07 |
Granted | 0.5 | 4.96 | 0 |
Exercised | 3.2 | 3.08 | 0 |
Expired | 0 | 0 | 0 |
Outstanding at end of year | $ 0.91 | $ 10.06 | $ 17.07 |
SHARE CAPITAL - Range of exerci
SHARE CAPITAL - Range of exercise prices and expiration date for warrants outstanding (Details) - $ / shares | 12 Months Ended | |||
Dec. 31, 2023 | Nov. 15, 2023 | Aug. 03, 2023 | Mar. 30, 2023 | |
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Warrants exercise price | $ 0.00001 | $ 0.00001 | $ 0.00001 | |
Warrants [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Number of warrants Outstanding | 9,752,820 | |||
$18.70 [Member] | Warrants [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Warrants exercise price | $ 18.7 | |||
Number of warrants Outstanding | 2,500 | |||
Exercisable until | 2025 | |||
$7.50 [Member] | Warrants [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Warrants exercise price | $ 7.5 | |||
Number of warrants Outstanding | 7,500 | |||
Exercisable until | 2026 | |||
$17.07 [Member] | Warrants [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Warrants exercise price | $ 17.07 | |||
Number of warrants Outstanding | 237,000 | |||
Exercisable until | 2027 | |||
$0.50 [Member] | Warrants [Member] | ||||
Share-based Payment Arrangement, Option, Exercise Price Range [Line Items] | ||||
Warrants exercise price | $ 0.5 | |||
Number of warrants Outstanding | 9,505,820 | |||
Exercisable until | 2029 |
SHARE CAPITAL - Additional In_2
SHARE CAPITAL - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||
Oct. 10, 2023 | Aug. 03, 2023 | Aug. 01, 2023 | Jun. 06, 2023 | Nov. 20, 2023 | Nov. 15, 2023 | Sep. 15, 2023 | Jul. 28, 2023 | Mar. 31, 2023 | Mar. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Gross proceeds from registered direct offering | $ 2,000 | ||||||||||||
Stok option, ordinary Shares | 22,000 | 800,937 | 0 | ||||||||||
Ordinary shares exercise price | $ 1.23 | $ 3.25 | $ 0 | ||||||||||
Intrinsic value of options exercised | $ 1 | $ 7 | |||||||||||
Unrecognized compensation | $ 539 | ||||||||||||
Pre-funded warrant issued purchase of ordinary shares | 2,574,295 | 3,671,910 | 1,032,615 | ||||||||||
Warrants exercise price | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||||||
Stock option plans, weighted average period | 2.66 | ||||||||||||
Number of prefunded warrants | 1,809,000 | 157,000 | 440,615 | 2,731,910 | 765,295 | 435,000 | |||||||
Conversion of prefunded warrants into ordinary shares | 1,809,000 | 157,000 | 440,615 | 2,731,910 | 765,295 | 435,000 | 1,081,000 | ||||||
Issuance of prefunded warrants | 3,671,910 | ||||||||||||
Issuance expenses | $ 235 | $ 177 | $ 188 | ||||||||||
Derivative warrant liabilities | 185 | 126 | |||||||||||
Allocation of ordinary shares to prefunded warrants | $ 50 | $ 62 | |||||||||||
Number of prefunded warrants remained outstanding | 940,000 | ||||||||||||
Accrued interest of short term debt | $ 500 | ||||||||||||
Concurrent private placement of exercise price | $ 0.85 | $ 0.5 | $ 1.66 | ||||||||||
Option Plan [Member] | |||||||||||||
Stok option, ordinary Shares | 171,250 | ||||||||||||
March Warrants [Member] | |||||||||||||
Pre-funded warrant issued purchase of ordinary shares | 1,517,615 | ||||||||||||
Warrants exercise price | $ 1.66 | ||||||||||||
August Warrants [Member] | |||||||||||||
Pre-funded warrant issued purchase of ordinary shares | 3,235,295 | ||||||||||||
Concurrent private placement of exercise price | $ 0.85 | ||||||||||||
March And August [Member] | |||||||||||||
Warrants to purchase ordinary shares | 9,505,820 | ||||||||||||
Percentage of warrants | 200% | ||||||||||||
Warrants and rights outstanding, term | 5 years 6 months | ||||||||||||
Pre-funded warrant issued purchase of ordinary shares | 4,752,910 | 4,752,910 | |||||||||||
Warrants exercise price | $ 0.00001 | ||||||||||||
Number of prefunded warrants | 3,671,910 | ||||||||||||
Concurrent private placement of exercise price | 0.5 | ||||||||||||
Accredited Institutional Investor [Member] | |||||||||||||
Gross proceeds from registered direct offering | $ 2,750 | $ 2,400 | |||||||||||
Stok option, ordinary Shares | 661,000 | 485,000 | |||||||||||
Pre-funded warrant issued purchase of ordinary shares | 2,574,295 | 1,032,615 | |||||||||||
Warrants exercise price | $ 0.00001 | ||||||||||||
Common Stock [Member] | |||||||||||||
Ordinary shares issued | 7,484,820 | 1,326,343 | |||||||||||
Conversion of loans (Shares) | 518,644 | 54,396 | 819,567 | ||||||||||
Minimum [Member] | March And August [Member] | |||||||||||||
Warrants exercise price | $ 0.42 | ||||||||||||
Maximum [Member] | |||||||||||||
Expiration period of shares | 10 years |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) | 12 Months Ended | ||
May 09, 2013 | Dec. 31, 2023 | Dec. 31, 2022 | |
Related Party Transaction [Line Items] | |||
Accrued management services | $ 86,000 | $ 86,000 | |
Mr. Trabelsi - Chief executive officer [Member] | |||
Related Party Transaction [Line Items] | |||
Monthly payment | $ 10,600 | ||
Bonus as a percentage of net profit | 2% | ||
Bonus as a percentage of revenue | 0.50% | ||
Mr. and Mrs. Trabelsi [Member] | |||
Related Party Transaction [Line Items] | |||
Proceeds from related party debt | $ 100,000 |
SEGMENTS, MAJOR CUSTOMERS AND_3
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Segment Reporting Information, by Segment (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues | $ 26,570 | $ 17,649 | $ 12,267 |
Operating Income (Loss) | (3,359) | (6,005) | (6,737) |
Goodwill | 7,026 | 7,026 | 7,026 |
Total Property and Equipment, net | 2,701 | 1,640 | 1,804 |
Cyber Security [Member] | |||
Revenues | 1,260 | 1,384 | 1,634 |
Operating Income (Loss) | 524 | 680 | 400 |
Goodwill | 1,075 | 1,075 | 1,075 |
Total Property and Equipment, net | 8 | 30 | 47 |
IoT [Member] | |||
Revenues | 23,766 | 15,628 | 8,904 |
Operating Income (Loss) | (99) | (3,993) | (3,004) |
Goodwill | 2,229 | 2,229 | 2,229 |
Total Property and Equipment, net | 2,519 | 1,590 | 1,543 |
e-Gov [Member] | |||
Revenues | 1,544 | 637 | 1,729 |
Operating Income (Loss) | (3,676) | (2,692) | (4,133) |
Goodwill | 3,722 | 3,722 | 3,722 |
Total Property and Equipment, net | $ 174 | $ 50 | $ 214 |
SEGMENTS, MAJOR CUSTOMERS AND_4
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Reconciliation of Operating Income (loss) of Reportable Segments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating loss | |||
Total operating loss of reportable segments | $ (3,359) | $ (6,005) | $ (6,737) |
Financial expenses, net | (663) | (1,751) | (3,396) |
Loss before income taxes | $ (4,022) | $ (7,756) | $ (10,133) |
SEGMENTS, MAJOR CUSTOMERS AND_5
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Operations by Geographic Area (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | $ 26,570 | $ 17,649 | $ 12,267 |
Property and equipment, net | 2,701 | 1,640 | 1,804 |
Africa [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 1,455 | 374 | 1,586 |
Property and equipment, net | 0 | 0 | 0 |
European countries [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 17,673 | 9,559 | 2,912 |
Property and equipment, net | 0 | 0 | 0 |
South America [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 12 | 0 | 37 |
Property and equipment, net | 0 | 0 | 0 |
United States [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 6,766 | 6,877 | 6,820 |
Property and equipment, net | 21 | 38 | 47 |
Israel [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 585 | 693 | 757 |
Property and equipment, net | 2,680 | 1,602 | 1,757 |
APAC [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Revenues | 79 | 146 | 155 |
Property and equipment, net | $ 0 | $ 0 | $ 0 |
SEGMENTS, MAJOR CUSTOMERS AND_6
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Revenues from External Customers by Products and Services (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from External Customer [Line Items] | |||
Revenues | $ 26,570 | $ 17,649 | $ 12,267 |
Raw materials and equipment [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues | 2,841 | 302 | 1,119 |
Electronic monitoring [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues | 17,819 | 11,614 | 6,393 |
Treatment programs [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues | 4,538 | 3,998 | 3,292 |
Maintenance, royalties and project management [Member] | |||
Revenue from External Customer [Line Items] | |||
Revenues | $ 1,372 | $ 1,735 | $ 1,463 |
SEGMENTS, MAJOR CUSTOMERS AND_7
SEGMENTS, MAJOR CUSTOMERS AND GEOGRAPHIC INFORMATION - Schedule of Major Customer Concentration (Details) - Sales [Member] - Customer [Member] | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | |||
Concentration percentage | 59% | 36% | 10% |
Customer A [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 50% | 36% | 0% |
Customer B [Member] | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 9% | 0% | 10% |
OTHER EXPENSE, NET - Other Expe
OTHER EXPENSE, NET - Other Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |||
Credit losses | $ 1,457 | $ 1,000 | $ 3,000 |
Other | 1,355 | 138 | 1,374 |
Total other expense, net | $ 2,812 | $ 1,138 | $ 4,374 |
OTHER EXPENSE, NET - Accounts R
OTHER EXPENSE, NET - Accounts Receivables Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |||
Balance at beginning of period | $ 12,667 | $ 11,667 | $ 8,667 |
Provision during the period | 1,457 | 1,000 | 3,000 |
Balance at end of period | $ 14,124 | $ 12,667 | $ 11,667 |
FINANCIAL EXPENSES, NET (Detail
FINANCIAL EXPENSES, NET (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Financial expenses: | |||
Interest, bank charges and fees | $ (2,512) | $ (1,770) | $ (3,642) |
Change in Fair value of derivative warrants liabilities | 2,313 | 0 | 0 |
Exchange differences, net | (464) | 19 | 246 |
Total financial expenses | $ (663) | $ (1,751) | $ (3,396) |
SUBSEQUENT EVENTS (Details)
SUBSEQUENT EVENTS (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | ||||||||
Aug. 03, 2023 USD ($) $ / shares shares | Apr. 19, 2024 USD ($) $ / shares shares | Nov. 15, 2023 USD ($) $ / shares shares | Mar. 30, 2023 USD ($) $ / shares shares | Apr. 08, 2024 shares | Jan. 19, 2024 ₪ / shares shares | Jan. 19, 2024 $ / shares shares | Dec. 31, 2023 ₪ / shares | Dec. 31, 2022 ₪ / shares | |
Amount of direct offering cost | $ | $ 2,750 | $ 2,000 | $ 2,400 | ||||||
Warrant issued purchase of ordinary shares | 661,000 | 1,081,000 | 485,000 | ||||||
Common Stock, Par or Stated Value Per Share | ₪ / shares | ₪ 2.5 | ₪ 2.5 | |||||||
Warrants exercise price | $ / shares | $ 0.00001 | $ 0.00001 | $ 0.00001 | ||||||
Concurrent private placement of warrant to purchase ordinary shares | 3,235,295 | 9,505,820 | 1,517,615 | ||||||
Concurrent Private Placement Of Class Of Warrant Or Right Exercise Price Of Warrants Or Rights | $ / shares | $ 0.85 | $ 0.5 | $ 1.66 | ||||||
Subsequent Event [Member] | |||||||||
Amount of direct offering cost | $ | $ 2,900 | ||||||||
Warrant issued purchase of ordinary shares | 2,873,885 | 940,000 | 4,250,000 | 4,250,000 | |||||
Shares issued | 1,475,142 | 1,475,142 | |||||||
Common Stock, Par or Stated Value Per Share | ₪ / shares | ₪ 2.5 | ||||||||
Warrants exercise price | $ / shares | $ 0.00001 | $ 0.45 | |||||||
Pre-funded warrant issued purchase of ordinary shares | 5,242,270 | 5,524,858 | 5,524,858 | ||||||
Pre-funded warrants exercise price | $ / shares | $ 0.00001 | ||||||||
Concurrent private placement of warrant to purchase ordinary shares | 8,116,155 | ||||||||
Concurrent Private Placement Of Class Of Warrant Or Right Exercise Price Of Warrants Or Rights | $ / shares | $ 0.38 |